What Moves Gold
Module 6 — Interest Rates and Gold
Gold pays no interest. When rates rise, holding an asset that yields nothing becomes more expensive relative to bonds and deposits, and gold often struggles. When rates fall, that cost declines and gold is often supported.
Markets price expectations, not announcements. Gold frequently moves before a central bank decision and then reverses when the decision matches what was already expected. For a foundation trader, the practical lesson is simple: do not hold a position into a rate decision without understanding the risk you are carrying.
Key concepts
- Gold pays no interest
- Real-rate expectations influence demand
- Markets often move before decisions
Practical example
Gold may react when expectations change days before a central-bank announcement.
Common mistake
Entering at the announcement because the headline seems obvious.
Knowledge check
Check your understanding
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