Three sets of numbers do much of the work in explaining gold’s price: US real yields, the value of the US dollar, and central bank gold demand. Gold pays no interest, so higher inflation-adjusted yields raise the cost of holding it. A stronger dollar makes gold more expensive for buyers using other currencies. Central bank buying adds demand that ignores both. None of these is a reliable signal on its own.
1. Real yields: the opportunity cost of holding gold
A real yield is a bond’s interest rate after expected inflation. If a 10-year US government bond yields 4% and inflation is expected to average 2.5%, the real yield is roughly 1.5%.
Why real rather than nominal yields? Gold is often held as protection against inflation, so what matters is the return available on alternatives after inflation is taken into account. A 5% bond yield with 5% inflation offers no real return at all; a 3% yield with 1% inflation offers 2%.
Because gold produces no income, holding it means giving up that real return. For many years this created a clear inverse pattern: when real yields rose, gold often fell, and when they dropped — especially below zero — gold tended to be supported.
Where to look: the yield on 10-year Treasury Inflation-Protected Securities (TIPS) is the standard measure, available as a free daily chart on the Federal Reserve Bank of St. Louis’s FRED database (series DFII10). For more on the mechanism, see this explainer on why gold traders watch real rates.
The caveat: the relationship weakened noticeably after 2022. Gold held up, and later rose, even as real yields climbed to their highest levels in more than a decade.
2. The US dollar
Gold is priced in dollars worldwide. When the dollar strengthens, an ounce of gold costs more in euros, yen or rupees, which can dampen demand outside the US; a weaker dollar has the opposite effect. The dollar and real yields often move together, because both respond to expectations for US interest rates.
Where to look: the US Dollar Index (DXY), which measures the dollar against a basket of major currencies.
3. Central bank gold demand
According to the World Gold Council, central bank net purchases exceeded 1,000 tonnes in each of 2022, 2023 and 2024 — roughly double the average of the previous decade. Commonly cited reasons include diversifying reserves away from the dollar and reducing exposure to sanctions risk. This buying follows long-term policy rather than bond yields, which helps explain why the traditional real-yield relationship loosened.
Where to look: the World Gold Council’s quarterly Gold Demand Trends report.
The calendar that links them
All three respond to expectations about US monetary policy, which is why US inflation data, the monthly jobs report and Federal Reserve decisions regularly move gold.
When the three pull in different directions
The numbers rarely line up neatly. Real yields might be rising, which on its own would weigh on gold, while the dollar weakens and central banks keep buying, both of which would tend to support it. The price then reflects whichever force markets judge most important at that moment — and that judgement can shift quickly. Looking at all three together gives a more balanced picture than focusing on any one of them.
Other factors in the background
- ETF flows — buying or selling through gold exchange-traded funds.
- Physical demand — jewellery and bar and coin buying, particularly in China and India.
- Risk sentiment — demand during financial or geopolitical stress, which is real but inconsistent.
How to use these numbers — and how not to
These indicators are best used as context: they help explain why gold is moving and which forces currently dominate. They are not trading signals. Relationships that held for a decade can break, several factors can pull in opposite directions, and markets often move on expectations before the data arrives.
Readers comparing where gold can be traded can find a list of platforms, published by a CFD broker that appears in it, at vtmarkets.com/discover/10-best-gold-trading-platforms-in-2026. As with any comparison, check each provider’s details independently.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Gold is a volatile instrument, and prices can move sharply against a position. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. This article is for informational purposes only and does not constitute investment advice or a recommendation to trade any instrument.