Gold's Run Continues: What Is Actually Driving the Price
Gold price targets make excellent headlines and poor plans. Three variables explain most of the move, and none of them are predictions.
The three drivers
- Real interest rates. Gold pays no yield, so it competes with real returns elsewhere.
- Central bank demand. Sustained official-sector buying puts a floor under the price.
- The rupee. Indian investors earn the dollar move plus any depreciation.
The allocation question
Gold is portfolio insurance, not a growth engine. A modest allocation, rebalanced on a schedule rather than on news, captures most of the diversification benefit without the timing risk.
This is general information, not investment advice. Speak to a registered adviser before acting.
