Absa Gold Exchange Traded Fund (ETF) recorded a new all-time high price of KES 4,275 on the Nairobi Securities Exchange (NSE), supported by the increase in gold prices.
Gold prices hit new heights of $3,579 or KES 441,040 per troy ounce this week, a 38% increase year-over-year, beating the previous record in April. The recent rally in the price of the yellow metal has been largely driven by the anticipated US interest rate cut and President Trump’s pressure on the Federal Reserve’s chief, Jerome Powell, and the attempted sacking of Governor Lisa Cook.
The embattled governor filed a lawsuit against Donald Trump’s move to fire her on allegations of mortgage fraud. However, the President urged the court to turn down Cook’s appeal to remain in office. The court should reach its ruling before the Federal Reserve’s meeting on September 17, when Cook will be one of 12 members of the rate-setting Federal Open Market Committee who can vote on interest rates.
Additionally, geopolitical instability is a key driver of the bullish run. Russia-Ukraine war, Israel-Hamas strife, and US tariffs on imports account for the geopolitical tensions.
Absa Gold ETF on the NSE
An EFT is an investment fund traded on the securities market. It pools funds from investors and invests in a diversified portfolio of assets, including stocks, bonds, commodities, and even gold. The Absa NewGold ETF is a gold-backed ETF listed on the Nairobi Bourse by Absa Bank. Each share represents ownership of a certain quantity of physical gold stored in secure vaults in London. The price of the ETF is highly correlated with the spot gold price. If gold prices increase, the share price of the Absa Gold ETF goes up, and vice versa.
Absa Gold ETF is traded on the NSE under the ticker symbol “GLD”. The ETF made its debut on the Kenyan Bourse on 29 March 2017, issuing 400,000 shares at KES 1,205 per share. The ETF’s listing marked a major milestone in the Kenyan capital markets, marking Kenya’s entry into the Exchange Traded Fund market. The counter has gained 31.1% on a year-to-date basis, reaching KES 4,275 from KES 3,260, ranking it the 31st stock on a year-to-date performance and 43rd most valuable stock at the NSE with a market share of KES 1.71 billion.
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