Gold can still lose value
Investors often buy gold when they are concerned about inflation, currencies or financial markets. This is why it is called a safe haven. The term describes how some investors use it; it does not mean its price is stable or that you cannot lose money.
The World Gold Council’s outlook published on 1 July 2026 described a sharp rise early in the year followed by a substantial fall by late June. This is a dated account of market conditions, not a current price quote. It shows why buying after a strong rise can still lead to a loss.
Gold produces no rent, interest or dividend. To turn an increase in its value into cash, you need to sell. Storage and other costs may continue while you hold it, whether its price rises or falls.
What affects the price
Interest rates, the US dollar, central-bank buying and demand from investors, jewellery buyers and industry can all affect gold. When interest rates after inflation fall, gold may become more attractive compared with assets that pay interest. That relationship does not hold in every period.
The World Gold Council’s mid-year outlook considered both rising and falling price scenarios as economic conditions changed. Treat such forecasts as possibilities to assess. They are not promised returns or a reason to assume that today’s price is good value.
- Interest-rate expectations and inflation
- Changes in the US dollar
- Central-bank purchases and investment-fund buying or selling
- Political and economic uncertainty
- Mine production, recycled gold and demand from buyers
Your return in naira
Gold is commonly priced in US dollars. If you measure your investment in naira, both the gold price and the exchange rate matter. A weaker naira can increase the naira value of gold even when its dollar price is unchanged. A stronger naira can reduce it.
For example, assume gold’s dollar price is unchanged and each dollar buys 10% more naira when you sell. The naira value would rise by 10% before costs. This calculation isolates the exchange rate; in practice, both prices can move together or in opposite directions.
If you are saving for an expense in dollars or pounds, measure progress in that currency too. A gain shown in naira may not cover the increase in the foreign-currency cost of your goal.
Buying physical gold or a gold product
With bars or coins, check purity, weight, authenticity, safe storage and insurance. Ask what the dealer would pay to buy the same item back. The difference between the buying and selling prices is the spread, and it reduces your return. Jewellery also includes workmanship and retail costs that you may not recover on resale.
A fund or another financial product gives you rights under that product’s terms. Check whether it holds physical gold, how ownership is recorded, who stores the gold and what happens if the provider fails. Product fees and currency-conversion costs can cause your return to differ from a headline gold price.
- Get the full purchase cost and the resale price or pricing method.
- Check storage, insurance, custody and management charges.
- Read any independent audit or backing report the product provides.
- Confirm how, when and at what cost you can sell or withdraw.
Decide what purpose it serves
Gold can spread exposure beyond property or naira income, but it cannot fund regular expenses without selling some of the holding. Decide how a price fall would affect your plans and whether the costs are reasonable for the amount you intend to invest.
Do not assume that an article about gold means Shard currently offers a gold investment. Check the available offerings and the terms of the specific product before making a decision.
Sources and further reading
This article provides general information, not personal investment, tax or legal advice. Check the current terms and rules for your investment. Dated market figures may have changed.