Category: Global Market

Gold Karat vs Gold Fineness: Understanding 999, 916, 875 and 750

Gold purity is often described in two different ways. One jeweller may call a piece 22K gold, while another may stamp it 916. An 18K ring may carry a 750 mark. These numbers are not competing standards. They are two ways of expressing how much pure gold is contained in an alloy.   Understanding both […]

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How Bond Yields Affect Gold Prices

Bond yields are one of the most closely watched influences on gold because they affect the return investors can earn from interest-bearing assets. When yields rise, bonds can become more competitive with gold. When yields fall, the opportunity cost of holding gold can decrease.   The relationship is important, but it is not mechanical. To […]

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How Real Interest Rates Affect Gold Prices

Real interest rates are one of the most important concepts for understanding gold. They help answer a simple question: after allowing for inflation, what return can an investor earn from holding a relatively safe interest-bearing asset?   Because gold does not pay a coupon or interest, changes in real yields can alter the opportunity cost […]

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How Inflation Affects Gold Prices

Gold is often described as an inflation hedge, but the relationship between inflation and gold prices is more complicated than that phrase suggests. Rising consumer prices can support demand for gold, especially when people are worried about the purchasing power of money. Yet high inflation can also lead to higher interest rates and higher bond […]

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Why Central Banks Buy Gold

Central banks hold foreign-exchange reserves so they can support confidence in their currencies, meet international obligations and respond to financial stress. Those reserves are usually spread across assets such as government bonds, foreign currencies and gold. Gold remains important because it brings characteristics that are difficult to replicate with any single currency or bond market. […]

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