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Why Gold and the US Dollar Sometimes Rise Together

Gold and the US dollar are often described as moving in opposite directions. That is a useful rule of thumb, but it is not a law.   There are periods when gold and the dollar rise at the same time. This can seem contradictory because gold is commonly priced in US dollars, but both assets […]

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What Happens to Gold When Interest Rates Are Cut?

Interest-rate cuts are often described as positive for gold. The basic logic is easy to understand: when returns on cash and bonds fall, the opportunity cost of holding a non-yielding asset such as gold can fall as well. But the relationship is not automatic. Gold can rise before a cut, fall after one, or move […]

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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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