Gold prices have reached a record $5,000 per ounce, equivalent to about Ksh638,000, due to the weakening US dollar. This global trend is increasing demand for the metal and affecting Kenya's financial markets. The Central Bank of Kenya is expanding its gold reserves to diversify foreign holdings.
Gold prices have climbed to historic highs as the US dollar continues to weaken, a trend driven by geopolitical tensions, shifting US trade policies, and expectations of monetary conditions. On January 26, 2026, gold crossed the $5,000 per ounce mark for the first time, with the dollar's decline making the metal more affordable for holders of other currencies and boosting global demand.
On Monday, the Japanese yen surged sharply, gold hit a record high, and the dollar fell against most major currencies. Investors fear that potential cooperation to support Japan could further erode confidence in the US dollar. The dollar just endured its worst week since May, rocked by Washington's erratic policy decisions.
Currency analysts note that signals of US support for yen-strengthening efforts have reignited debate on coordinated currency interventions to lower the dollar against major trading partners. Proponents say such a move could enhance the competitiveness of American exporters versus rivals like China and Japan, though it raises concerns about the dollar's long-term status as the world's reserve currency.
In Kenya, the dollar's drop is enhancing gold's appeal as a safe-haven asset, with traders showing greater interest in gold-linked investments. The Central Bank of Kenya (CBK) is actively growing its gold holdings to lessen dependence on the US dollar and guard against currency fluctuations. Recently, Kenya announced plans to buy more gold in October 2025 as part of diversifying its foreign-exchange reserves. CBK Governor Kamau disclosed that the bank is eyeing additions to its gold via the Bank of England and other international banks for secure storage.
The CBK has launched a program to purchase gold directly from local artisans and small-scale miners to build reserves while bolstering the domestic mining sector. Recent reports put Kenya's official gold reserves at 0.02 tonnes, or about 643 ounces. Analysts forecast further rises, with prices potentially exceeding $6,000 (around Ksh773,000) by the end of 2026, fueled by strong central bank and retail demand amid tensions.