Gold prices declined to a two-month low in the Nigerian market as global bullion prices continued to weaken amid a stronger United States dollar and rising geopolitical tensions.

Spot gold traded below N200,000 per gram in the local market, with the retail price of 24-karat gold ranging between N195,000 and N199,000 per gram.

The decline reflected the broader weakness recorded in the international bullion market over the past month.

Gold prices in naira terms have fallen by between two and 3.5 per cent during the period following declines in global spot prices.

Market data showed that bullion prices were testing a key technical support level around the 200-day Simple Moving Average.

Analysts observed that a sustained break below the $4,395 to $4,400 range could trigger further declines toward earlier consolidation levels.

Despite the recent correction, gold has maintained strong year-to-date performance.

The precious metal remains up more than 16 per cent in global spot terms and approximately 34 per cent on asset-backed local trackers.

The performance continued to reinforce gold’s position as a hedge against naira depreciation in major trading hubs such as Lagos and Kano.

Market activity showed that local price movement could remain under pressure unless global spot prices recover above the 21-day and 50-day Simple Moving Averages currently positioned above $4,586 and $4,625 per ounce.

Previous local resistance levels were identified around N6.7 million per ounce.

Global market sentiment was influenced by renewed geopolitical tensions following recent United States military strikes in Iran.

The development strengthened the US Dollar Index rather than boosting demand for bullion, as investors shifted toward the greenback as a safe-haven asset.

The stronger dollar also pressured gold prices lower, contributing to the decline to two-month lows.

Bullion prices dropped by as much as two per cent to around $4,365 per ounce during trading sessions.

According to reports, American forces targeted military facilities and other locations near the Strait of Hormuz.

The Islamic Revolutionary Guard Corps later claimed responsibility for retaliatory actions against the United States base linked to the attack.

Kuwaiti air defence authorities also reportedly responded to drone and missile threats, increasing concerns over instability in the Middle East.

The developments heightened fears that geopolitical tensions could disrupt peace negotiations and sustain elevated inflationary pressures globally.

Market participants also remained concerned that rising oil prices could force central banks to maintain higher interest rates for longer periods.

Gold traditionally performs weaker in high-interest-rate environments because bullion does not provide interest income.

Investors also adjusted their expectations in the options market, with traders reducing bullish positions on gold.

The largest gold-backed exchange-traded fund, SPDR Gold Shares, recorded a decline in implied volatility, indicating weaker expectations for large price swings in the near term.

The premium for speculative and hedging positions linked to gold price increases also fell to one of its lowest levels since December, reflecting softer bullish sentiment in the market.