What Moves Gold
Module 4 — Major Gold Market Drivers
- The US dollar — gold is priced in dollars, so dollar strength weighs on it
- Interest rates and central bank policy — the opportunity cost of holding a non-yielding asset
- Inflation expectations — gold is widely used as an inflation hedge
- Geopolitical risk and market stress — safe-haven demand
- Central bank reserve buying and selling
- Physical demand — jewellery, industry and investment products
These drivers frequently conflict. When they do, price becomes choppy and unreliable. Recognising conflicting drivers is itself a reason to stand aside.
Key concepts
- Dollar, rates, inflation, risk, and demand can matter
- Drivers can conflict
- Price remains the final evidence
Practical example
A weaker dollar may support gold while rising yields limit the move.
Common mistake
Assuming one positive driver guarantees a rally.
Knowledge check
Check your understanding
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