Further to the respective monetary safe havens, gold prices continue to consolidate around the key $3,900 per troy ounce level. Even with the US Dollar still trying to recover alongside reservations towards a potential federal government shutdown, they continue to keep a bid bias. Just look at Wednesday when gold was trading with minor daily gains, which is a direct result of the market reacting to mixed economic data.
The world we are operating in today is having a profound impact on the larger financial environment. Despite the US Dollar picking up strength, gold continues to hold its appeal for investors as a devaluing currency inherently makes gold more expensive. Aspects of US federal government remain unstable. Simultaneously, the US yield curve is experiencing a broad retracement across sectors.
In Nigeria, the inflation rate has experienced a remarkable turn around. The figure has since fallen to 24.2% year-on-year in March 2025, to 20.1% in August. At the same time, there has been a huge increase in consumer good imports from China. This raises some interesting questions about a causal relationship between these two economic trends. This influx of low-cost Chinese products seems to be chilling inflationary trends within the Nigerian economy.
The trade dynamics between Africa and China tells a different and far more complicated tale. Recent news reports have documented how Africa’s trade deficit with China has increased sharply. We expect this trend to hold in the months ahead. This ever-increasing disparity begs the question of the long-term viability of such trading partnerships.
Sub-Saharan Africa’s inflation will fall to 13% in 2025, after peaking last year at 18%. Analysts point to this expected drop, in part, as a result of the rush of cheaper Chinese consumer goods flooding the market. Tanzania and Côte d’Ivoire have emerged as leaders on this trend. Beyond their willingness to administer tariff-free and quota-free access, they have raised imports dramatically since March 2025.
Both Tanzania and Côte d’Ivoire are forecasted to experience GDP growth exceeding 6% in 2025, driven by heightened investment activities. Chinese exports to Africa skyrocketed by 34% y-o-y between April and July. This phenomenal jump is indicative of the booming economic ties being forged between the two areas.
Chinese exports to the United States shrank remarkably over the same period, dropping by 23% YoY. Exports to ASEAN countries increased by 17%, and exports to Europe grew a far humble 7%. These figures underscore a dramatic reversal in Beijing’s trade priorities, as Chinese leaders increasingly see African markets as friendlier destinations than older partners.
The global trade map is fluid as countries react to the new economic reality. Experts note that while some regions face challenges from inflation and trade deficits, others are capitalizing on new opportunities for growth.
“Don’t worry at all about higher Eurozone inflation.” – FXStreet