Economy
How to Trade Gold in Nigeria
Gold has traditionally been seen as a way to store your money. It’s not affected directly by either fiscal policy or monetary policy of governments and central banks like currencies.
It will always be worth something – unlike a currency that can end up being almost worthless as a result of rapid inflation, for instance. That’s why whether it’s in the uptrend or in the downtrend, the gold market offers high liquidity and excellent profit-making opportunities due to its unique position within the world’s economic and political systems.
Some traders often fail to take full advantage of the changes in gold prices because they haven’t learned its unique characteristics or the hidden pitfalls that can steal their profits. Let’s take a look at the advantages of trading gold, factors that can influence its prices and how to trade gold profitably.
What Drives Gold Prices
Like we’ve mentioned before, gold prices can be driven by a limited number of catalysts. Market sentiment, volume and trend intensity are generally driven by:
- Inflation and deflation
- Greed and fear
- Supply and demand
Market participants can face increased risk when they trade gold in reaction to one of these factors, when in fact, it’s another one driving price action. Imagine there’s a major selloff in the financial market, and gold starts rallying.
Traders assume that fear is moving the precious metal and expect that the emotional crowd will carry the price higher.
However, inflation may have actually triggered the stock’s decline, attracting a more technical crowd to the market that will sell aggressively.
Combinations of these forces are always in play in world markets, establishing long-term themes that track equally long uptrends and downtrends.
Gold attracts numerous crowds with diverse and often opposing interests. The so-called gold bugs (individuals who buy gold as protection against an anticipated collapse in the value of currency, stocks, etc.) stand at the top of the crowd, allocating an outsized portion of family assets to gold equities. They are long-term market players who are rarely discouraged by recurring downtrends, so they eventually shake out less ideological traders.
Gold bugs add massive liquidity, providing a continuous supply of buying interest at lower prices. They also serve the contrary purpose of providing efficient entry for short-sellers, especially in emotional markets when one of the three above-mentioned factors swings the market in favour of strong buying pressure.
To trade gold profitably, you need to know the crowd sentiment. Cayman Sentiment Index is a unique indicator offered by the AMarkets online broker absolutely for free to all of its clients that will allow you to spot potential market extremes, which can be considered as a strong signal for a correction or a trend reversal.
Examine long-term charts
Make sure to examine the gold chart carefully. Start with a long-term history that goes back at least 100 years. In addition to spotting trends that lasted for decades, you’ll see that the yellow metal has also trended lower for long periods of time, robbing profits from gold bugs. From a strategic standpoint, such an analysis is useful because it helps you identify price levels that need to be watched if and when gold decides to test them again.
Summing up
To trade the gold market profitably, make sure to study how the three polarities we mentioned in this article impact gold buying and selling decisions. Don’t forget to devote some time and analyze the long and short-term gold charts to see which key price levels may come into play.
Keep in mind that traders widely use gold as a “safe haven” asset. When market participants are worried about risk trends, they tend to flock to gold.
On the other hand, as risk appetite grows, expect a selloff in haven assets. As you can see, gold is an important hedge tool against inflation and a valuable asset that can bring you good profits.
If you consider trading gold, make sure you choose a reputable global broker with favourable trading conditions. AMarkets offers some of the lowest spreads in the industry to trade gold.
Just recently, it slashed its spreads on gold by 30% on ECN accounts, allowing its clients to make the most out of their gold trading.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange weakened by 0.22 per cent on Tuesday, April 28, with the market capitalisation down by N4.8 billion to N2.420 trillion from N2.425 trillion, and the NASD Unlisted Security Index (NSI) down by 9.01 points to 4,044.96 points from 4,053.97 points.
During the session, the price of Central Securities Clearing System (CSCS) Plc went down by N1.82 to N767.05 per share from N78.87 per share, while FrieslandCampina Wamco Nigeria Plc appreciated by N1.90 to N100.00 per unit from N98.10 per unit.
According to data, the value of trades increased by 265.7 per cent to N27.1 million from N7.4 million units, and the volume of transactions surged by 305.2 per cent to 1.3 million units from 319,831 units, while the number of deals decreased by 6.9 per cent to 27 deals from 29 deals.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with the sale of 3.4 billion units valued at N8.4 billion, followed by CSCS Plc with 59.8 million units exchanged for N4.0 billion, and Okitipupa Plc with 27.8 million units traded for N1.9 billion.
GNI Plc also finished as the most traded stock by volume on a year-to-date basis, with a turnover of 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units sold for N1.2 billion.
By Adedapo Adesanya
Pressure is beginning to mount on the Nigerian Naira in the different segments of the foreign exchange (FX) market despite an oil windfall triggered by the Middle East crisis.
On Monday, April 27, the domestic currency further weakened against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) by N16.47 or 1.2 per cent to N1,380.71/$1 from the previous day’s N1,364.24/$1.
It was not different against the Pound Sterling in the same market window, as it lost N16.04 to trade at N1,863.76/£1 versus Monday’s closing rate of N1,847.72/£1, and against the Euro, it slipped by N12.72 to close at N1,615.01/€1 versus N1,602.29/€1.
The Naira also depreciated against the Dollar at the black market yesterday by N5 to quote at N1,390/$1 compared with the previous price of N1,385, and at the GTBank forex counter, it further crashed by N9 to settle at N1,379/$1 compared with the preceding session’s N1,370/$1.
The continued decline of the Naira comes as traders increasingly seek other safe-haven currencies amid continued global disruptions.
The benefit awash in the global market is making foreign portfolio investors stay short in Nigerian markets. Despite this, the daily FX publication released showed that interbank turnover rose to $98.829 million across 78 deals, up from $76.65 million.
Meanwhile, the cryptocurrency market remained cautious, with Bitcoin (BTC) trading at $77,216.66 despite surging oil prices and geopolitical tensions over a potential extended US naval blockade of the Strait of Hormuz.
Analysts say the supply overhang has finally dried up, and the sellers who were spooked by macro shifts or quantum fears have already exited, leaving the market much thinner on the sell-side.
Investors will await decisions made by central banks this week. The US Federal Reserve will announce its rate decision later on Wednesday, while the European Central Bank (ECB) follows on Thursday.
Ethereum (ETH) gained 1.5 per cent to trade at $2,324.59, Dogecoin (DOGE) chalked up 1.4 per cent to sell for $0.1016, Solana (SOL) appreciated by 0.6 per cent to $84.85, Cardano (ADA) grew by 0.5 per cent to $0.2483, and Binance Coin (BNB) advanced by 0.2 per cent to $627.15.
However, TRON (TRX) depreciated by 0.6 per cent to $0.3224, and Ripple (XRP) lost 0.03 per cent to sell at $1.39, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) were unchanged at $1.00 each.
By Adedapo Adesanya
Oil was up by nearly 3 per cent on Tuesday as persistent worries about supply constraints from the closed Strait of Hormuz continued, with Brent futures for June rising by $3.03 or 2.8 per cent to $111.26 a barrel, and the US West Texas Intermediate (WTI) crude futures growing by $3.56 or 3.7 per cent to $99.93 a barrel.
An earlier round of negotiations between the United States and Iran collapsed last week after face-to-face talks failed.
Ship-tracking data showed significant disruptions in the region, with six Iranian oil tankers forced to turn back due to the US blockade, but some traffic is still moving.
Prices trimmed some of the advances after the United Arab Emirates (UAE), the fourth-largest producer in the Organisation of the Petroleum Exporting Countries (OPEC), said on Tuesday it would exit the group on this Friday, May 1, 2026.
This dealt a blow to the oil-exporting group and its de facto leader, Saudi Arabia.
The UAE could quickly add between 1 million and 1.5 million barrels per day of output. However, with the Strait of Hormuz effectively closed, analysts said that there’s nowhere for that supply to go.
The UAE joined OPEC in 1967, but tension with Saudi Arabia over production quotas has been building for years.
Under the OPEC+ deal, the country has been held to roughly 3 million barrels per day while sitting on capacity above 4 million. It has been pushing toward 5 million barrels per day by 2027, and that target is hard to achieve with quotas built around someone else’s view of the market.
The war in Yemen broke whatever was left of diplomatic patience.
President Donald Trump said he was unhappy with the latest Iranian proposal to end the war. The proposal would avoid addressing the nuclear programme until hostilities cease and Gulf shipping disputes are resolved.
The Idemitsu Maru, a Panama-flagged tanker carrying 2 million barrels of Saudi oil, and an LNG tanker managed by the Abu Dhabi National Oil Company (ADNOC) crossed the Strait on Tuesday, shipping data showed.
Vortexa data showed that the amount of crude oil held around the world on tankers that have been stationary for at least seven days rose to 153.11 million barrels as of April 24.
The American Petroleum Institute (API) estimated that crude oil inventories in the United States fell by 1.79 million barrels in the week ending April 24. The official data from the US Energy Information Administration (EIA) will be released later on Wednesday.
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