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NSE’s gold investors see rally spilling to this year
UK gold bullion bars are stacked at Baird & Co in Hatton Garden in London on October 8, 2025. Investors in the Absa NewGold ETF could see further gains in 2026, with global lenders forecasting higher gold prices.
As global investors turned to the safety of gold assets in a year of geopolitical turbulence, the precious metal’s price rally rewarded holders of the Absa NewGold exchange-traded fund (ETF) at the Nairobi bourse with a 70.4 percent gain in the value of their units.
The ETF, whose primary listing is on the Johannesburg Stock Exchange, saw its price rise from Sh3,165 per unit on January 1, 2025 to Sh5,395 on December 31 at the Nairobi Securities Exchange (NSE). The price of the underlying gold rose by 66.5 percent to close the year at $4,326 (Sh558,054) per troy ounce in 2025, after touching an all-time high of $4,549 (Sh586,821) on December 26.
The unit price of the ETF has doubled in just over two years, rivalling the performance of some of the NSE’s top-returning blue-chip equities.
When it was introduced to the Kenyan market in March 2017, the ETF gave capital markets investors local access to gold as an investment asset for the first time, while also providing an alternative to the dollar as a safe-haven option during periods of market turbulence.
Before its introduction, Kenyan investors seeking exposure to gold had to trade the commodity in physical form (bullion) or through offshore markets, both of which carried higher costs and risks.
Holding bullion or other gold assets, such as coins or jewellery, also involves challenges such as secure storage, lengthy buying and selling processes, and the risk of fraud. As a result, gold was often used as an insurance asset rather than an investment asset.
Through the ETF, investors can trade gold as an investment asset and benefit from price movements without holding physical bullion. An ETF is a fund to which investors contribute money, which is used to buy assets that make up an index or a defined group of securities.
The underlying asset can also be a commodity such as gold, silver or platinum. However, investors do not own the asset directly but instead hold shares in the ETF, whose value moves in line with that of the underlying asset.
The Absa NewGold ETF listed at Sh1,250 per unit, when gold was trading at $1,255.90 (Sh162,011) per troy ounce on the international market. Each unit of the ETF is pegged to one-hundredth of a troy ounce of gold and the prevailing dollar-shilling exchange rate.
The value of the ETF changed little in its first three years as global gold prices remained largely stable.
In mid-2020, however, gold prices surged above $2,000 an ounce amid market jitters caused by the Covid-19 pandemic. Prices remained elevated after Russia’s invasion of Ukraine in February 2022, which triggered another wave of global macroeconomic and geopolitical uncertainty.
The conflict between Israel and the Palestinian group Hamas in October 2023 further heightened tensions that supported higher gold prices.
In 2025, the rally was driven largely by US policy actions, including the introduction of tariffs on global trade partners and repeated attacks by US President Donald Trump on the Federal Reserve, which undermined confidence in the independence of the US central bank and the dollar.
“Investors sought a safe haven away from the uncertainty of the US market, resulting in high demand for gold. When gold rises to an all-time high, so will the EFT at the NSE,” said Wesley Manambo, a senior research associate at Standard Investment Bank.
There are 400,000 units of the Absa NewGold ETF listed on the NSE, with a total market value of Sh2.16 billion at current prices. Foreign and local institutional investors hold 64.8 percent and 27.76 percent of the units, respectively, while local individual investors hold 7.46 percent.
These investors could see further gains in the coming year, based on bullish gold price forecasts by some global lenders.
In a December note, US investment bank Goldman Sachs said it expects gold to test the $4,900 (Sh632,100) mark by December 2026 in its base case, citing strong central bank demand and further US Federal Reserve rate cuts.
“We expect central bank gold buying to remain strong in 2026, averaging 70 tonnes per month (close to its 66 tonnes 12-month average, but four times above the 17 tonnes pre-2022 monthly average),” Goldman Sachs said in a December 18 note.
“We see upside risk to our gold price forecast from a potential broadening of diversification to private investors.”
Dutch lender ING Group also expects gold prices to rise in 2026, saying in its commodities outlook that key drivers—central bank buying, Fed rate cuts, a weaker dollar, concerns over the Fed’s independence, and ETF demand—remain in place.
However, ING warned of downside risks if some central banks choose to sell their gold reserves.
US bank Citi struck a more cautious tone, forecasting a base-case gold price of $4,200 (Sh541,800) an ounce in 2026. In a December 8 note, Citi said concerns over tariff-related growth and inflation in the US are being offset by lower interest rates and easing budget-deficit pressures.
