By David Akinmola
Gold prices have dropped to their lowest level in two months, slipping below N200,000 per gram as easing geopolitical tensions and renewed investor appetite for risk assets weakened demand for the precious metal.
The decline marks a significant reversal for gold, which had surged to record highs earlier in the year amid heightened global uncertainty and strong demand for safe-haven assets.
Market data showed that the price of gold fell below the N200,000-per-gram threshold in the local market, reflecting losses in international bullion prices as investors shifted funds into equities and other higher-yielding assets.
Analysts attributed the decline to improving sentiment in global financial markets following signs of easing geopolitical risks, particularly in the Middle East, as well as expectations that major central banks could maintain a gradual approach to monetary policy adjustments.
The drop in gold prices comes after months of sustained gains driven by global economic uncertainty, inflation concerns and geopolitical tensions that had boosted demand for the metal.
According to market experts, the recent decline underscores the sensitivity of gold prices to changes in investor sentiment and global macroeconomic developments.
“Gold typically performs well during periods of uncertainty. As geopolitical concerns ease and investors become more comfortable taking on risk, demand for safe-haven assets tends to moderate,” an investment analyst said.
Despite the latest pullback, analysts noted that gold remains one of the best-performing asset classes over the past year, supported by strong central bank purchases and continued concerns over global economic growth.
The decline could offer relief to jewellery manufacturers and consumers who had faced significantly higher prices in recent months as bullion rallied to historic levels.
Investors are also closely watching signals from the United States Federal Reserve and other major central banks, as interest rate expectations continue to influence the attractiveness of non-yielding assets such as gold.
Higher interest rates generally reduce the appeal of gold by increasing the returns available on interest-bearing investments, while lower rates tend to support bullion prices.
Market participants said the near-term direction of gold will depend on developments in global monetary policy, inflation trends and geopolitical conditions.
While the current correction has pushed prices to a two-month low, analysts believe persistent economic uncertainties and continued central bank demand could provide support for gold in the medium term.
For Nigerian investors, the decline presents a mixed picture, offering cheaper entry points into the market while reducing the value of existing holdings accumulated during the recent rally.
The latest price movement highlights the volatility that has characterized global commodity markets this year as investors respond to changing economic and geopolitical conditions.
