The NewGold Exchange Traded Fund (ETF), Ghana’s flagship gold-backed security, has lost over 15% of its value in just one month, reflecting a broader slump in global gold prices and shifting investor sentiment away from traditional safe-haven assets.
As of Wednesday, May 14, 2025, the ETF closed at GH¢385.12, down from GH¢483.59 recorded on April 15. The sharpest decline came on Wednesday, when the fund plunged by GH¢41.89 in a single trading session. It marked the ETF’s lowest closing price in more than a year.
The fall came despite strong performance elsewhere on the Ghana Stock Exchange (GSE), where the GSE Composite Index rose by 2.3% to 6,607.59 and market capitalization hit GH¢142.5 billion.
ETF Mirrors Global Gold Price Trends
The NewGold ETF is designed to track the price of gold, with each unit backed by physical bullion. As such, its performance on the GSE is closely linked to international gold prices, which have seen downward pressure in recent weeks. Analysts cite several factors driving the decline, among them, stronger-than-expected U.S. economic data, reduced inflation fears, and a firming U.S. dollar.
According to some analysts, risk appetite is returning to the market, investors are moving capital into equities and bonds, pulling away from commodities like gold, which are seen as more defensive plays.
Indeed, gold, long considered a hedge against uncertainty, has seen a cooling period as central banks signal interest rate stability and markets brace for improving growth.
Trading Volume Shrinks
Investor demand for the ETF also appears to be waning. On May 14, just 9,057 units of NewGold ETF changed hands on the GSE, a sharp drop compared to over 33,000 units traded in late April. The value of those trades totaled GH¢3.49 million, far lower than prior peaks.
The declining volume suggests caution among investors, particularly as other sectors of the stock market experience renewed bullish momentum.
What Is the NewGold ETF?
Launched by Absa Capital, the NewGold ETF offers investors exposure to international gold prices without having to hold the metal itself. It serves as a convenient proxy for gold investment, especially for those looking to hedge against currency depreciation or inflation. In times of economic uncertainty, the ETF has historically attracted interest from both institutional and retail investors.
A Time for Caution or Opportunity?
While the recent decline may unsettle short-term holders, others see it as a potential buying opportunity. Some market watchers believe that with geopolitical risks and fiscal uncertainty still present, gold’s long-term value as a portfolio stabilizer remains intact.
