Oil Fields of Alkebulan with with Juanita Sallah: The Golden Axis (2): Why the gold strategy outlasts the geopolitical panic

This column studied the divergent methods of two ancient gold powers—Ghana and Egypt—in a piece titled “The Golden Axis: Ghana, Egypt, and the Future of Power” in early March. The report stated that, whereas Egypt was using gold as a central bank hedge, Ghana was redefining itself as a sovereign manager of the commodity through mechanisms such as GoldBod’s revamped royalty structure.

Less than a month after publication, a geopolitical shock, (which started barely a week before the article went to press) has put the theory to the test. As the dispute between the US and Iran enters its second month, global commodity markets have witnessed significant volatility. According to Bloomberg Intelligence, net outflows from commodity ETFs totalled around $11 billion in March, the highest monthly withdrawal since 2005. The SPDR Gold Shares ETF (GLD) alone accounted for more than $7 billion of the flight.”

While institutional investors in New York and London were selling, a recent country risk assessment by Fitch Solutions reveals that one West African economy is standing out from the emerging market upheaval.

According to a Fitch research issued on March 31, 2026, headlined “Ghana’s Economy to Remain Relatively Shielded From US-Iran Conflict,” the country’s status as Africa’s biggest gold producer functions as a substantial counterweight to external pressures.

“We believe that Ghana’s economy will remain relatively insulated from the fallout of the US-Iran conflict as it benefits from elevated gold prices,” Fitch analysts said in their key assessment.

The Divergence: Tactical Exit Versus Structural Anchor

The Golden Axis theory is based on this contrast: Western investors see gold as a tactical trade, but Ghana views it as a structural pillar.

Robin Brooks, a senior scholar at the Brookings Institution and former chief economist at Goldman Sachs, described the recent gold selloff to Bloomberg as “a positioning flush rather than a fundamental breakdown in its safe-haven role.”

Brooks said: “Fiscal policy in the U.S. and elsewhere is just as reckless as before the war, so the search for safe havens from debt monetisation will persist.”

His opinion is consistent with BMO Economics’ commentary, which stated in a February 13 report headlined “Precious Metals: The Sky’s the Limit or Ready to Reset?” that gold is “still widely under-allocated in institutional and retail portfolios, particularly among Western investors.”

Goldman Sachs reiterated this position on April 2, maintaining its year-end gold price prediction of $5,400 per ounce despite the significant decline. Lina Thomas and Daan Struyven, analysts, predict that after volatility has subsided, central bank purchases will average around 60 tonnes per month.

The investment bank did warn of “tactical downside risks” that could drive gold prices as low as $3,800 per ounce if the oil supply shock develops. Goldman downplayed worries that central banks may liquidate gold holdings to defend their currencies, stating that Gulf states were more inclined to sell US Treasuries due to their dollar pegs.

 Ghana’s Gold Counterbalance

While Western fund managers debate entry and departure points, Ghana’s gold exposure is not a matter of portfolio allocation; it is the foundation of the country’s foreign account.

The Fitch study reveals a considerable disparity in Ghana’s trade trends. While the global economy reels from rising energy prices, Fitch grades Ghana’s hydrocarbon trading scenario as “broadly neutral.” With the Tema Oil Refinery resuming crude processing in December 2025 following years of debt-related shutdowns, the government’s current account is unlikely to incur major direct damage from oil imports.

Although there are indicators at the country level that the refinery is not operating at full capacity as originally planned, this neutrality allows the entire force of the gold market to anchor external stability

According to Fitch commodities estimates, gold would average USD 4,600 per ounce in 2026, which would be the biggest annual average on record and a 33.7% increase over the 2025 average of USD 3,442.

For Ghana, where gold accounts for almost three-quarters of commercial exports in 2025, math is convincing. Fitch expects gold export receipts to increase by 12.9% to USD 23.7 billion in 2026. According to the research, gold output is expected to expand by 7.1% this year due to project-led supply expansion at the Bibiani, Chirano, and Namdini mines.

The flood of hard money from bullion exports gives the Bank of Ghana the firepower that many of its continental counterparts currently lack. According to Fitch, Ghana’s foreign currency reserves have reached USD 14.4 billion, which is enough to cover imports for six months. “Strong export receipts will continue to bolster Ghana’s already robust forex reserves,” they added. The evaluation also forecasts a current account surplus of 4.2% of GDP, a significant increase over the average deficit of 3.8% of GDP between 2010 and 2024.

This position is expected to reduce downward pressure on the Ghanaian cedi. While the research recognises that policymakers may allow “a modest depreciation bias to support export competitiveness,” the general prognosis is for “broad currency stability.”

Fitch predicts GHS 11.4 per US dollar by the end of the year, citing the central bank’s ability to manage volatility in the interbank market.

On the fiscal front, the analysis implies that Ghana’s state finances are less vulnerable to the Middle East instability. While the 2026 budget is more expansionary than the previous year, Fitch predicts the fiscal deficit will grow from 0.6% of GDP in 2025 to only 2.7%. This remains much below the 2010-2024 average of 5.0%.

The analytical report specifically relates this resilience to the same policy processes discussed in the first edition of The Golden Axis. Together with the newly implemented gold royalty framework and easing domestic borrowing costs, Fitch analysts said, the Goldbod royalty framework “provides the government with room to deploy some counter‑cyclical fiscal measures in the event of a prolonged energy price shock without materially increasing public debt.”

This is the key difference between Ghana’s stance and that of a Western institutional investor. When volatility surges, the latter can exit a gold ETF trade with a single mouse click. Ghana’s sovereign capture mechanisms, including GoldBod’s purchasing authority and a sliding-scale royalty framework, adjust the state’s share of price increases to provide fiscal space regardless of market sentiment.

The Inflation Transmission Mechanism

Despite the strong external picture, the Fitch assessment is clear about where the U.S and Iran conflict’s damage would be felt: in consumer prices. Higher worldwide energy costs are projected to directly translate into greater transportation and utility expenses in Ghana, where fuel prices are controlled by the market.

“The primary channel through which the US-Iran conflict and higher global energy prices will affect Ghana is inflation and, by extension, monetary policy,” the report said.

As a result, Fitch expects headline inflation to increase from 3.3% year on year in February to 12.5% by the end of 2026. The experts also identified a special risk to food inflation from rising global fertiliser prices during the primary planting season in southern Ghana. If the situation escalates to Fitch’s “extend‑to‑escalate” scenario, inflation might reach 15.0%.

This inflationary pressure is likely to keep the Bank of Ghana in a holding pattern. After 1,400 basis point reduction since mid-2025, Fitch expects the policy rate to continue at 14.00%. The study warns that if inflation rises, the central bank may start tightening, potentially raising rates to 16.00% in the second half of 2026.

Growth Outlook Trimmed

Fitch has revised Ghana’s 2026 real GDP growth prediction lower due to increased energy costs and the predominance of agriculture, which accounts for one-fifth of nominal GDP. The estimate has been reduced from 5.9% to 5.5%.

“Elevated inflation and weaker confidence are also likely to weigh on investment decisions, putting some downward pressure on gross fixed capital formation over the coming months,” the study said.

The Axis Holds

Speaking to Bloomberg Television on March 24, Christian Mueller-Glissmann, a Goldman Sachs strategist, simply stated the market dynamic as follows: “It does tell me, it’s probably an opportunity for longer term investors.”

His observation emphasises the underlying divide revealed by the US-Iran confrontation. For Western portfolio managers, gold remains a trading asset entered when volatility surges, exited when the currency strengthens, and re-entered when the Federal Reserve suggests rate reduction.

Gold in Ghana is the axis around which external stability, fiscal credibility, and currency resilience currently revolve. This structural function is supported by Fitch data, which show a forecast current account surplus of 4.2% of GDP, reserves sufficient to cover six months of imports, and a fiscal situation that can absorb counter-cyclical measures without sparking a debt spiral.

The Golden Axis remains solid. However, as the Fitch research clearly shows, it does not provide insulation from the costs of global conflict. Ghanaian households will pay more at the pump should the tax relief President Mahama gave the citizenry on fuel wane. The citizenry will also continue to pay more for maize at the market. The difference is that the sovereign financial sheet, the foundation on which long-term development is built, is not being pushed to its limits.

For investors and policymakers who have read Part I of this series, the lesson of the last month is clear: a nation that collects and harnesses its resource riches through sovereign processes is playing a fundamentally different game than a trader timing COMEX-related entry and exits. One is subject to the whims of sentiment. The other is supported by the weight of geology and policy.

The entire world continues to observe which strategy holds up the best.

The writer is a media strategist and founder of Oil Fields of Alkebulan, a policy-driven media platform examining Africa’s resource capital, governance systems, and long-term economic competitiveness. Her work challenges prevailing narratives and advances a strategy-led vision for Africa’s global positioning

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