Gold hits N220,000/g in Nigeria as traders await US inflation data

In Nigeria, the price of gold per gram currently stands at approximately N220,000, inclusive of retail markup fees, as traders anticipate the release of US inflation data. Local metal dealers in major Nigerian markets like Lagos, Kano, and Abuja typically apply a markup of 5% to 10% above the spot rate. Globally, traders refrain from making significant directional bets before the US Consumer Price Index (CPI) figures are released.

A higher CPI could weaken gold by strengthening the US dollar and US yields, while a lower CPI might bolster gold's value due to potential Federal Reserve interest rate cuts. For comparison, one troy ounce equals about 31.1035 grams. The global spot price of gold, converted to Nigerian Naira using the official exchange rate of roughly N1,430/$, remains a benchmark.

Retail traders generally incorporate a local markup of 5%-10% over the pure spot price. The Central Bank of Nigeria's ongoing policy of purchasing gold domestically through the National Gold Purchase Program provides a strong foundation for the prices paid by local miners and bullion dealers. Currently, gold is valued at over $4,400 per ounce in London, demonstrating resilience above this threshold for the third consecutive day.

Metal traders are preparing ahead of the forthcoming US CPI release. If there are indications of lower inflation or interest rates, the US dollar may weaken, potentially directing more capital into non-yielding assets like gold. However, recent surges in oil prices have reignited inflation concerns, especially due to the ongoing US-Iran diplomatic negotiations and the reopening of waterways.

Higher energy prices have sustained global inflation concerns, reinforcing gold's role as a safe-haven asset. Central bank rate cuts have become more challenging amid high energy costs, as the risk of persistent price increases looms. President Trump hinted at potential military reparation claims from Iran due to damages from the ongoing conflict, causing heightened risk-averse sentiments across Asia, with rising oil and Treasury yields.

Market participants remain uncertain whether gold can maintain its upward trajectory, as profit-taking ahead of the CPI release could trigger a short-term correction in the metal's price.