US-Iran tensions spark Safe-Haven rush as gold hits N190,000/g in Nigeria

Tensions between Iran and the United States have led to a rush for safe-haven investments in Nigeria, where gold prices have soared to N190,000 per gram. The precious metal briefly dipped toward a four-week low of $4,320 in early Wednesday hours before recovering to levels just above that mark as the European session began. A weakening US Dollar is aiding the commodity's recovery; however, a September rate hike from the US Federal Reserve appears likely due to ongoing inflation pressures stemming from Middle East tensions.

These tensions escalated after the US attacked Iranian-owned rocket launchers in the Strait of Hormuz on Sunday, prompting Iran's retaliation against US-owned facilities in the region. This follows a week of escalating conflict, including Iran launching ballistic missiles and drones at American interests in Bahrain, Kuwait, and Jordan on Wednesday.

Nigeria's gold primarily comes from small-scale miners, many of whom operate informally in regions like Zamfara, Kebbi, and Niger State. The government has invested billions of Naira in formalizing these operations to prevent the outflow of precious metals and boost local revenue. However, an estimated tens of thousands of unauthorized diggers across the country contribute significantly to Nigeria's informal economy, with trade networks reportedly generating millions of US dollars daily in the north.

Illegal mining and gold smuggling cost Nigeria up to $9 billion annually, according to NEITI's findings. Most of the informally mined gold never enters the formal financial system, often being trafficked through Dubai or the global black market.