Nigeria’s gold prices are holding steady at N178,000 per gram, despite a strengthening naira and a hawkish tilt by the United States central bank.

According to Nairametrics, gold sellers in the country’s main gold markets in Lagos, Kano and Abuja usually charge a domestic premium of five per cent to 10 per cent above the spot rate.

An appreciating naira makes the naira cost of buying dollar-quoted ounces of gold more affordable, since gold is priced globally in US dollars, and this pushes prices down locally.

The 20-day simple moving average has flattened at around N179,000 per gram as near-term profit-taking keeps prices within a range. The 14-day Relative Strength Index sits between 48 and 52, a neutral reading that reflects a balance between gains in international bullion prices and the appreciation of the naira, whether sustainable or overextended.

Demand from buyers remains strong around the N175,000 to N177,000 per gram support level, driven by retail jewellery purchases and private asset-protection buying.

On the breakout signal, a sustained close above N182,000 per gram may suggest a return of the local bullish trend, possibly driven by naira weakness, a sharp rally in spot gold prices, or both.

The Federal Ministry of Solid Minerals and the Central Bank of Nigeria (CBN) have also kept up the drive to buy Nigerian-mined and refined gold bullion, in order to cushion the country’s foreign reserves and liquid cash against devaluation.

The CBN’s National Gold Purchase Programme (NGPP) buys domestically refined gold in naira to boost strategic foreign reserves and reduce foreign exchange risk.

The NGPP provides a structural floor for the domestic price of gold in naira. A premium over the NGPP price is usually required to account for short-term movements in the exchange rate and in international spot gold prices. The central bank’s purchases also provide consistent institutional demand for domestic bullion.

US Treasury yields and intermittent rebounds in the US dollar have, for now, capped explosive upside gains, creating a consolidation corridor for global bullion. The adoption of LBMA-compliant standards in West Africa is also boosting cleaner export pipelines and local market liquidity.

Spot gold found support above several key psychological levels after US jobs data eased inflation expectations, which lowered the odds of a more aggressive Federal Reserve interest rate hike. Gold is a zero-yield asset, so a pause in rate hikes is typically supportive.

Concerns about accelerating inflation, driven by the potential for energy-led price pressures, continue to weigh on gold. Crude oil prices hit a near two-week high as markets worried about supplies amid tensions in the Middle East.

Fighting between the Iran-allied Houthis and Saudi Arabia has intensified over the past week, in retaliation for the kingdom’s support of Yemeni government forces. Houthi energy terminals and fuel reserves in Yemen were also reportedly struck by a Saudi-led coalition.

Meanwhile, the American dollar remained under bearish pressure for the second day in a row and stayed comfortably below its two-week high, helping the metal to regain some positive traction. However, the bearish fundamental backdrop warrants caution before traders set up their next directional move in gold, and they should look for sustained strength beyond the near-term trading range.