Gold costs have surged to historic highs in 2025, surpassing $3,500 per ounce, a milestone that defies typical market traits.
Historically, gold performs inversely to rates of interest, rising when charges fall, however the valuable steel continues to rally whilst main central banks, notably the U.S. Federal Reserve, have but to implement fee cuts this yr.
Based on {financial} specialists talking on the Comercio Companions H2 {Economic} Outlook Discussion board in Lagos, the continued gold rally stems from geopolitical rigidity, strong central {bank} purchases, and inflationary issues, underscoring gold’s enduring attraction as a safe-haven asset.
“Shopping for extra gold is at all times good. It stays one of many most secure and most dependable shops of worth,” stated Professor Joseph Nnanna, Chief Economist on the Development Bank of Nigeria.
Professor Nnanna highlighted gold’s broader worth past funding returns, emphasizing its potential to drive industrial development in rising economies.
“When central banks supply gold domestically, it stimulates the complete mining worth chain, from uncooked extraction to refining and jewelry manufacturing. That catalyzes industrialisation,” he defined.
He added that central banks are more and more looking for diversification throughout diversified asset lessons, together with cryptocurrencies and stablecoins, to hedge towards forex volatility and future shocks.
Referencing the Central Bank of Nigeria’s asset profile, Prof. Nnanna famous the presence of reserve currencies just like the Chinese language renminbi and the U.S. greenback, alongside gold holdings.
Nevertheless, he cautioned towards overreliance on fiat currencies.
“The greenback has depreciated in latest months, whereas gold continues to understand. Diversifying reserve property isn’t just prudent, it’s crucial.”
He defined that {economic} shocks, whether or not inner or exterior, have an effect on a number of sectors, and sustaining a balanced asset portfolio is significant for long-term stability.
Zeal Akaraiwe, CEO of Graeme Blaque Advisory, echoed this sentiment, attributing the latest acceleration in gold shopping for to geopolitical dangers, notably these stemming from U.S. coverage actions.
“Our capacity to settle worldwide transactions is more and more influenced by political choices made in America. This vulnerability is pushing international locations to hunt alternate options with gold being a number one choice,” Akaraiwe remarked.
He emphasised that gold’s rise displays a strategic shift away from greenback dominance, with central banks globally selecting to de-dollarise their reserves amidst international uncertainty.
