Gold investors at the Nairobi Securities Exchange (NSE) closed 2025 with strong gains, as global uncertainty pushed more capital into safe-haven assets. The rally rewarded holders of the Absa NewGold exchange-traded fund (ETF), whose unit price surged by more than 70 percent over the year.
The performance places the gold-backed ETF among the best-performing investment products at the NSE, rivaling returns posted by some blue-chip equities.
Gold ETF Delivers Strong Returns
The Absa NewGold ETF rose from Sh3,165 per unit at the start of 2025 to Sh5,395 by December 31. This represents a 70.4 percent gain for investors during the year.
The rally mirrored movements in global gold prices. Gold closed 2025 at $4,326 per troy ounce, up 66.5 percent over the year, after touching a record high of $4,549 in late December.
Each unit of the ETF tracks one-hundredth of a troy ounce of gold, adjusted for the prevailing dollar-shilling exchange rate. As gold prices climbed, the value of the ETF moved in tandem.
How the ETF Works
An exchange-traded fund pools investor money to buy a defined basket of assets. In this case, the underlying asset is gold.
Investors do not own physical gold. Instead, they hold units in the ETF, whose price rises or falls in line with global gold prices. This structure allows investors to gain exposure to gold without the cost, risk, or logistics of holding bullion.
Before the ETF’s introduction in Kenya, investors accessed gold mainly through physical bullion or offshore markets. Both options came with higher costs, security risks, and limited liquidity.
From Insurance Asset to Investment Tool
The Absa NewGold ETF was listed at the NSE in March 2017 at Sh1,250 per unit, when gold traded at about $1,256 per ounce. Early trading was muted as global gold prices remained stable.
Momentum picked up in 2020 during the COVID-19 pandemic, when investors rushed to safety amid market turmoil. Prices stayed elevated following Russia’s invasion of Ukraine in 2022 and later conflicts in the Middle East.
By 2025, geopolitical tension and policy uncertainty in the United States added fresh fuel to the rally.
Global Uncertainty Drives Demand
Gold prices climbed sharply in 2025 as investors reacted to trade tensions, tariff threats, and repeated public attacks on the US Federal Reserve by President Donald Trump. These developments weakened confidence in the dollar and boosted demand for gold.
“Investors sought a safe haven away from uncertainty in the US market,” said Wesley Manambo, a senior research associate at Standard Investment Bank. “When gold rises to record highs, the ETF at the NSE follows.”
Who Owns the ETF?
There are 400,000 units of the Absa NewGold ETF listed at the NSE, with a total market value of about Sh2.16 billion at current prices.
Foreign institutional investors hold the largest share at 64.8 percent. Local institutions own 27.76 percent, while individual investors account for 7.46 percent.
The strong performance has reinforced gold’s appeal as both a hedge against volatility and a long-term store of value.
Bullish Outlook Extends to 2026
Several global investment banks expect the rally to continue into 2026.
Goldman Sachs forecasts that gold could reach $4,900 per ounce by December 2026. The bank cites strong central bank buying, expected US interest rate cuts, and continued diversification away from the dollar.
“We expect central bank gold buying to remain strong in 2026,” Goldman Sachs said in a December note, pointing to demand levels far above pre-2022 averages.
ING Group also expects gold prices to rise, citing the same factors. However, it warned that prices could soften if central banks begin selling reserves.
Citi Group struck a more cautious tone. The US bank projects gold at $4,200 per ounce in 2026, arguing that lower interest rates and easing fiscal concerns could cap further gains.
What It Means for NSE Investors
For Kenyan investors, the outlook suggests that gold will remain an important portfolio diversifier. The Absa NewGold ETF offers exposure to global trends while trading locally in shillings.
As uncertainty persists in global markets, gold’s role at the NSE appears set to grow, extending a rally that has already reshaped returns for investors over the past two years.
