News Guide Africa

Tag: Middle East war

  • Why Investors are Trading Gold for Yield

    Why Investors are Trading Gold for Yield

    By Adnan Adams Mohammed;

    Financial and Economic Journalist

    For centuries, gold has been the undisputed “safe havens” for investors.

    When the world trembles be it from war, inflation, or political upheaval investors have traditionally sprinted toward the yellow metal. But as we cross the first quarter of 2026, a strange phenomenon is unfolding in the global markets: gold is retreating precisely when the headlines say it should be soaring.

    The precious metal has recently endured its longest losing streak in years, with prices sliding below the US$4,700 mark. This downward spiral comes despite a backdrop of geopolitical tension and energy shocks that would, in any other era, have sent bullion prices to the moon.

    The “higher for longer” shadow

    The primary antagonist in gold’s current drama is not a lack of demand, but the “Iron Grip” of global central banks. The U.S. Federal Reserve, alongside its peers in Europe and Asia, has signaled a hawkish stance that few saw coming at the start of the year.

    With oil prices hovering above US$100 per barrel due to ongoing Middle Eastern instability, inflation has proven stickier than anticipated. Consequently, central banks are refusing to blink. By signaling that interest rate cuts are “off the table” for the foreseeable future, they have increased the “opportunity cost” of holding gold.

    “Gold doesn’t pay a dividend or an interest rate,” explains one senior market analyst. “When you can get a guaranteed 4% or 5% return on government bonds because central banks are keeping rates high, the ‘shiny rock’ in your vault starts to look a lot less attractive, no matter how much trouble is brewing globally.”

    The inflation paradox

    The current market presents a fascinating paradox. Traditionally, gold is a hedge against inflation. However, in 2026, inflation is actually hurting gold. This is because modern markets view high inflation not as a reason to buy gold, but as a reason for the Federal Reserve to get aggressive. The stronger the inflation data, the more likely the Fed is to hike rates or keep them elevated, which in turn strengthens the U.S. Dollar. Since gold is priced in dollars, a “Super-Greenback” makes the metal more expensive for international buyers, further dampening demand.

    A technical reset?

    Despite the gloom, many analysts argue this is a “healthy correction” rather than a collapse. Earlier in 2026, gold hit a staggering all-time high of US$5,595 per ounce. The current slide, while painful for short-term traders, is being viewed by institutional giants like J.P. Morgan and Goldman Sachs as a necessary reset.

    “The structural bull case for gold isn’t dead,” says a report from Fitch Solutions. “Central banks in emerging markets are still buying gold at record levels to diversify away from the dollar. What we are seeing now is the ‘speculative froth’ being blown off the top.”

    The road ahead

    For the average investor in Ghana and abroad, the next 30 to 60 days will be critical. If central banks begin to see a cooling in energy prices, they may soften their tone, providing the “oxygen” gold needs to rally again.

    Until then, the Gilded King remains in retreat, proving that even the world’s oldest currency is not immune to the relentless math of modern monetary policy. In 2026, it seems, the “Safe Haven” has a new landlord: the Central Bank Policy Rate.

     

     

     

     

  • Monetary Policy vs. Precious Metals: Why Gold is Trapped in a 2026 Bear Market

    Monetary Policy vs. Precious Metals: Why Gold is Trapped in a 2026 Bear Market

    By Adnan Adams Mohammed;

    Financial and Economic Journalist

    In a startling reversal of fortune, gold the “perpetual safe haven” has entered a decisive bear market in March 2026. After hitting a historic peak of US$5,589 per ounce in late January, the metal plummeted nearly 19%, trading as low as US$4,551 last week.

    While geopolitical tensions in the Middle East and threats to the Strait of Hormuz typically send gold prices climbing, a new economic reality has taken hold. In 2026, the traditional “flight to safety” is being rerouted by the sheer gravity of global monetary policy.

    The hawkish “hold”: why the Fed broke the rally

    The primary catalyst for the current slump is a radical shift in expectations from the U.S. Federal Reserve. On March 18, the Fed held interest rates steady at 3.5%–3.75%, but it was the “dot plot” that rattled investors.

    Plagued by sticky inflation fueled by rising energy costs, the Fed signaled it would likely authorize only one rate cut for the entirety of 2026.

    The Opportunity Cost: Because gold pays no interest, it struggles to compete when government bonds offer high, guaranteed yields.

    The Dollar Factor: The hawkish stance pushed the U.S. Dollar Index toward the 100.0 mark, making gold which is priced in dollars prohibitively expensive for international buyers.

    The inflation paradox of 2026

    In a typical cycle, high inflation (driven currently by an oil spike above US$100 per barrel) would be gold’s best friend. However, in the current landscape, markets view high inflation as a “green light” for central banks to keep rates high.

    “Gold is being sold during an active conflict because the oil shock from that conflict is forcing central banks to stay hawkish,” noted a research strategist at Pepperstone. “Higher oil means higher inflation, which means gold suffers despite the geopolitical backdrop.”

    Institutional “paper” flushes

    The bear market is being accelerated by the “paper market” futures contracts and gold-backed ETFs. As prices began to slip in February, many leveraged institutional investors faced margin calls.

    Liquidity Squeeze: Large funds have been selling their gold positions not because they lack faith in the metal, but because gold is highly liquid. They are “selling what they can” to raise cash and cover losses in other volatile sectors like silver and tech.

    Retail Retreat: After a 70% surge in 2025, many retail investors are booking profits, further increasing the “global glut” of available bullion.

    Ghana’s strategic pivot

    For Ghana, the world’s leading gold producer per capita, this “bear trap” is more than a market headline, it’s a budgetary crisis. With export revenues directly tied to the spot price, the Ministry of Finance is reportedly reviewing its 2026 revenue targets.

    However, the Bank of Ghana remains a steady hand. While private investors flee, the central bank continues its “Gold-for-Reserve” program and remains part of a broader trend of “de-dollarization,” where sovereign states accumulate physical gold as a long-term hedge against the very systemic risks currently causing the price dip.

    As gold is currently caught in a tug-of-war between geopolitical fear (which wants prices higher) and monetary math (which is pulling prices lower), for now, the math is winning.

    Analysts suggest that until the Federal Reserve moves from a “hawkish hold” to a true “easing cycle,” the gilded king will remain trapped in its 2026 retreat.

     

     

     

  • Ghana’s factories brace for “war risk” costs and supply shocks

    Ghana’s factories brace for “war risk” costs and supply shocks

    By Adnan Adams Mohammed

    The escalating conflict in the Middle East, involving the United States, Israel, and Iran, is no longer just a distant geopolitical crisis.

    For Ghana’s manufacturing sector, the “war drums” are beginning to echo in the form of disrupted shipping routes and surging production costs.

    Industry leaders and regulators are now sounding the alarm: while the impact may not be felt today, a “ticking time bomb” of supply chain exhaustion could soon hit local shelves.

    The CEO of the Association of Ghana Industries (AGI), Seth Twum Akwaboah, while speaking on Joy News’ PM Express, urged calm but warned against complacency. He explained that most Ghanaian factories operate on a three-to-six-month production cycle. Because many manufacturers stocked up on raw materials before the February 2026 escalation, prices remain temporarily stable.

    “During that period, if there are major disruptions, it may not affect you much because we bought the goods at a particular price,” Mr. Akwaboah noted. “For now, we are not panicking. We are just hoping and waiting to see how things progress.”

    However, that “buffer” is finite. Once current stocks are depleted, factories will have to re-enter a global market defined by chaos and high costs.

    The “strait” of uncertainty

    The heart of the problem lies in the Strait of Hormuz, a critical maritime artery that became a flashpoint on February 28, 2026. The Ghana Shippers Authority (GSA) has issued a stern warning to importers and exporters to prepare for “unavoidable” delays.

    According to data from the United Nations Conference on Trade and Development (UNCTAD), the Strait carries:

    25% of global seaborne oil trade;

    33% of global seaborne fertilizer trade;

    Significant volumes of Liquefied Natural Gas (LNG).

    With major shipping lines now rerouting vessels to avoid the conflict zone, the “landed cost” of goods in Ghana is set to skyrocket.

    The high price of “war risk”

    The most immediate financial blow to Ghanaian businesses comes in the form of War Risk Surcharges. These are additional fees imposed by shipping lines to cover the increased insurance and security costs of navigating near conflict zones.

    Mr. Akwaboah revealed that these charges are now as high as US$1,500 to US$2,000 per container.

    “If this is added to your cost and unplanned, you can imagine the impact,” he said. He further detailed a “negative domino effect”:

    Longer Routes: Rerouting ships adds weeks to delivery times.

    Higher Fuel Prices: Disrupted oil flows push up logistics costs.

    Input Shortages: Raw materials from Southeast Asia are failing to arrive on schedule.

    A plea for diplomacy

    The AGI CEO emphasized that Ghana’s manufacturing sector heavily reliant on imported machinery and raw materials cannot sustain a prolonged disruption.

    In a candid moment, he pointed toward international diplomacy as the only long-term solution, referencing the need for global leaders, including American President Donald Trump, to iron out differences and restore global trade stability.

    For now, Ghana’s factories continue to hum, but the shadow of the Middle East conflict is growing longer. If the tension in the Strait of Hormuz drags on, the “Made in Ghana” label may soon come with a much higher price tag.