Gold prices in Nigeria have remained steady at about N178,000 per gram, as movements in the naira and a hawkish shift in the US Federal Reserve’s policy outlook influence the domestic market.
Gold dealers in major Nigerian markets, including Lagos, Kano and Abuja, typically charge a domestic premium of between five and 10 per cent above the international spot price.
Since gold is priced internationally in US dollars, an appreciating naira generally reduces the local currency cost of purchasing the precious metal. However, exchange rate movements and changes in international bullion prices continue to influence domestic prices.
The 20-day Simple Moving Average for gold has flattened at around N179,000 per gram, indicating a period of consolidation as short-term profit-taking limits price movements.
The 14-day Relative Strength Index is hovering between 48 and 52, reflecting a neutral market position as gains in international gold prices are balanced against movements in the naira.
Demand remains firm around the N175,000 to N177,000 per gram range, supported by retail jewellery purchases and demand from investors seeking to preserve the value of their assets.
A sustained close above N182,000 per gram could signal a return to an upward price trend, potentially driven by further naira weakness or a sharp rally in international gold prices.
On the domestic policy front, the Federal Ministry of Solid Minerals and the Central Bank of Nigeria have continued efforts to purchase locally mined and refined gold to strengthen the country’s foreign reserves and provide protection against currency depreciation.
Under the CBN’s National Gold Purchase Programme, the apex bank buys domestically refined gold in naira as part of efforts to build strategic reserves and reduce exposure to foreign exchange risks.
The programme also provides a source of institutional demand for locally produced bullion, helping to support domestic prices. Local gold prices may nevertheless trade at a premium to the programme’s purchase rates, reflecting short-term movements in exchange rates and international spot prices.
Globally, gold’s gains have been constrained by US Treasury yields and intermittent rebounds in the dollar, keeping prices within a relatively narrow trading range.
However, softer US jobs data and easing inflation expectations have supported bullion by reducing expectations of more aggressive Federal Reserve interest rate increases. As a non-yielding asset, gold typically benefits when interest rates are expected to remain stable or decline.
Concerns about renewed inflationary pressures, particularly from rising energy prices, have also influenced the outlook for gold. Crude oil prices recently climbed to a near two-week high as markets assessed potential supply disruptions linked to tensions in the Middle East.
Meanwhile, weakness in the US dollar has provided some support for the precious metal, although uncertainty over the direction of monetary policy and broader market conditions continues to limit confidence in a sustained breakout.
The adoption of standards compliant with the London Bullion Market Association in West Africa is also expected to improve gold export channels and support liquidity in regional markets.
Boluwatife Enome
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