…CBN reserves soar to N2.77trn

The WGC’s survey, which gathered responses from 73 Central Banks between February 25 and May 20, reveals a strong global appetite for gold. A record 95 per cent of the banks now expect to increase their gold reserves within the next year, up from 81 per cent in 2023, while 76 per cent anticipate a higher proportion of gold in their total reserves over the next five years. Conversely, nearly three-quarters of respondents expect their dollar-denominated reserves to decline, reflecting rising concerns about U.S. economic policy, inflation, and geopolitical risks.

Central banks across the globe are turning more decisively to gold as a preferred reserve asset, signalling a strategic shift away from the U.S. dollar, according to the latest annual survey by the World Gold Council (WGC). The findings came as Nigeria’s Central Bank reported a dramatic rise in the value of its gold holdings, which more than doubled to ₦2.77 trillion by the end of 2024.

“Gold’s resilience during crises, its diversification benefits, and effectiveness as a hedge against inflation are key reasons central banks are reinforcing their gold positions,” the WGC noted in its statement.

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This pivot is not merely theoretical. Central banks have added more than 1,000 metric tons of gold annually for the past three years, more than double the average of 400–500 tons recorded in the previous decade.

In Nigeria, the Central Bank’s surge in gold reserve value did not result from increased holdings, which remained unchanged at 687,402 troy ounces. Instead, it was driven by a steep rise in global gold prices. By year-end 2024, the CBN valued its gold at $2,624.39 per ounce, up from $2,062.98 the year prior. This revaluation is consistent with global price movements, as gold hit a historic high of $3,500.05 per ounce in April 2024, spurred by persistent global economic volatility and the ongoing aftermath of Russia’s invasion of Ukraine.

Data from the London Bullion Market Association (LBMA) underscores the trend, showing an average gold price of $2,386 per ounce for 2024, a 23 per cent increase year-on-year. In the fourth quarter alone, prices averaged $2,663 per ounce, further enhancing the book value of central bank holdings.

Emerging markets are at the forefront of this strategic shift. According to the WGC, 69 per cent of central banks in these economies are more likely to increase their gold reserves, compared to 40 per cent in advanced economies.

Concerns about trade disputes, tariffs, and broader geopolitical instability were also cited by 59 per cent of respondents as factors influencing reserve management decisions.

With central banks across regions ramping up gold acquisitions in response to inflation, currency instability, and broader economic uncertainty, gold appears to be regaining its traditional role as a cornerstone of monetary security.

For Nigeria, the timing of this global trend has yielded significant gains — at least on paper — strengthening the country’s external asset position without a single additional ounce of bullion added.