Why does gold go up when stocks fall?

In a sell-off many investors move money into assets seen as safe, and gold is one of them. The effect is not guaranteed: in sharp crashes gold sometimes falls at first because investors sell it to raise cash.

Does gold always rise with inflation?

Not always. Over decades gold has broadly kept pace with inflation, but in the short term it can fall if interest rates rise faster than prices.

Why is the gold price in my currency at a record when the dollar price is not?

Because your local price is the dollar price multiplied by the exchange rate. If your currency weakens against the dollar, gold becomes more expensive locally even if the dollar price is unchanged.

Why Does the Gold Price Go Up and Down? 9 Factors That Move It

Gold is priced by supply and demand — but not like other commodities

Most commodities are consumed: oil is burned, wheat is eaten. Gold is not. Almost all the gold ever mined still exists, held as jewelry, bars, coins and central-bank reserves. Annual mine production adds only around 1–2% to that stock. This means the price is set less by how much gold is produced and more by how much people want to hold it compared with other assets. The factors below change that desire to hold, sometimes within minutes.

1. Real interest rates

Gold produces no income. Holding it means giving up the interest you could earn on a bank deposit or a government bond. The relevant measure is the real interest rate — the yield after inflation. When real rates rise, the opportunity cost of holding gold goes up and the price often weakens; when they fall or turn negative, gold becomes more attractive. For years the yield on US inflation-protected Treasury bonds was one of the best single predictors of the gold price. The link has been looser since 2022, when strong buying by central banks lifted gold even as rates rose, but traders still react sharply to US Federal Reserve decisions and inflation data.

2. The US dollar

Gold is quoted internationally in US dollars. When the dollar weakens against other currencies, gold becomes cheaper for buyers in euros, rupees or yuan, which tends to raise demand and the dollar price. When the dollar strengthens, the opposite usually happens. The relationship is not mechanical, but on most days gold and the dollar index move in opposite directions.

3. Central-bank buying

Central banks hold gold as a reserve asset that carries no credit risk and cannot be frozen by another government. According to the World Gold Council, they bought more than 1,000 tonnes in each year from 2022 to 2024, roughly double the pace of the previous decade, and kept buying heavily in 2025. Countries such as China, Poland, Türkiye and India have been among the largest buyers. This steady, price-insensitive demand is one reason gold passed 3,000 and then 4,000 dollars an ounce in 2025 and set a record near 5,590 dollars in January 2026.

4. Inflation and currency debasement

Gold is widely seen as a store of value over long periods because its supply cannot be expanded at will the way paper money can. When investors fear high inflation or heavy government borrowing, demand for gold often rises. Over short periods, though, gold is an imperfect inflation hedge: it can fall during inflationary spells if interest rates rise faster than prices.

5. Risk, crises and geopolitics

Gold is a classic safe haven. Wars, financial crises, banking scares, trade disputes and elections with uncertain outcomes can all send money into gold quickly. These moves can be sharp and short-lived: the price may jump on the news and give back part of the gain once markets calm down.

6. Investment flows: ETFs, futures and bars

Exchange-traded funds backed by physical gold let investors buy gold through a brokerage account, and their holdings change by tens of tonnes in a strong month. In the futures market, speculative traders can build or unwind large positions in days, amplifying moves in both directions. Retail demand for bars and coins — strong in Europe, the US, China and India — adds to the picture.

7. Jewelry demand and the seasons

Jewelry has historically accounted for roughly 40–50% of annual gold demand, led by China and India. Demand is seasonal: it tends to rise around Chinese New Year, the Indian wedding season, Akshaya Tritiya and Diwali. Jewelry buyers are price-sensitive, so very high prices tend to reduce their purchases and encourage people to sell old pieces for recycling.

8. Mine supply and recycling

Mines produce around 3,600 tonnes a year, and recycling adds another 1,100–1,400 tonnes depending on the price. New mines take a decade or more to develop, so supply responds slowly. Strikes, energy costs or disruption in a major producing country can still nudge the price, but supply is usually a smaller driver than investment demand.

9. Your local currency, taxes and duties

The price in your country is the dollar price converted at your exchange rate, so local gold can rise even when the international price is flat — simply because your currency weakens. That is why gold often hits records in currencies such as the Turkish lira, the Egyptian pound or the Argentine peso long before it does in dollars. Import duties, sales taxes and local premiums matter too: India’s domestic price, for instance, moves when the government changes its customs duty. Our country pages show each local price and the exchange rate used.

Can anyone predict the gold price?

No one can reliably forecast short-term moves. Bank forecasts for the year ahead are often wide of the mark, and the factors above can pull in opposite directions at the same time. What you can do is understand why the price is moving, avoid buying or selling in a panic, and compare offers against the live price. If you are investing, our beginner’s guide to buying gold explains the main options and their costs.

To see how these forces have played out, look at the gold price history and chart or follow the gold-to-silver ratio, which shows how gold is behaving relative to its more industrial cousin.