Three Drivers Behind Gold’s Resilience This Quarter
Central-bank buying, real-yield dynamics and safe-haven demand, examined with the latest available data.
This article is general market commentary and does not constitute personalised investment advice. Market commentary reflects the author’s analysis at the time of publication and may change without notice. It should not be interpreted as a prediction or guarantee of future market performance.
Gold has held up well this quarter. Three factors are most often cited: purchases by central banks, the path of real interest rates, and demand for perceived safe-haven assets during periods of uncertainty.
Central-bank demand
Official reserve data shows continued purchases by several central banks, a source of demand that tends to be less sensitive to short-term price moves.
Real yields
Because gold pays no interest, lower inflation-adjusted yields reduce the cost of holding it. A renewed rise in real yields would remove part of that support.
Risks
Each driver can reverse. Gold prices have experienced sharp declines in the past, and commentary on past drivers is not a prediction of future performance.
Sources and data
- IMF, International Financial Statistics reserve data
- US Treasury, real yield curve rates
Corrections and updates
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