Local Markup and Exchange Rate Impact
The price of pure gold in Nigeria has reached approximately N220,000 per gram. This retail price includes local markup fees, which dealers in major markets such as Lagos, Kano, and Abuja typically set at 5% to 10% over the global spot rate.
The global spot price of gold is converted to Nigerian Naira using the current official exchange rate of approximately N1,430/$ (black market rate). One troy ounce of gold is equivalent to approximately 31.1035 grams.
The Central Bank of Nigeria continues to support the local market through its National Gold Purchase Program. This policy establishes a floor value for local miners and bullion dealers, while private individuals and institutions use physical and tokenized gold to hedge against inflation.
Global Traders Await US Inflation Data
Globally, gold is demonstrating strength, holding its position above $4,400 per ounce in London. This marks the third consecutive bullish session for the precious metal as traders prepare for the release of US Consumer Price Index (CPI) figures.
A higher CPI reading could strengthen the US dollar and Treasury yields, putting downward pressure on gold. Conversely, a lower CPI could increase expectations of Federal Reserve interest rate cuts, pushing gold prices higher.
The CME FedWatch tool currently shows a 50/50 chance of a September rate decision following a weak non-farm payrolls report of 23,000. This weak jobs data has weighed on the US dollar, boosting demand for gold.
Geopolitical Tensions and Central Bank Accumulation
Geopolitical risks continue to support gold's safe-haven status. Tensions around the potential opening of the Strait of Hormuz and stalled US-Iran diplomatic negotiations have kept energy prices high, raising global inflation concerns.
Iranian media reports suggest Iran is willing to delay negotiations until after the expiration of US President Joe Biden's term on January 20, 2029. This has increased risk-averse sentiment across Asian markets, driving up oil prices and Treasury yields.
Meanwhile, central banks in emerging markets, including the People's Bank of China, remain steady buyers of physical gold. These institutions are consistently increasing their physical gold reserves to diversify their holdings away from the US dollar.
