There are really four golds and it all depends on what's driving the price. But only one of these factors is driving it at once. This is my deep analysis and also part of my finance project for Senior Year
1. Rates Gold:
Rates gold moves on thing, yields. Yields go up, gold goes down. This is really about opportunity costs because an asset that yields nothing like gold, has to compete against an asset that yields something like a bond. When rates go up bonds seem more attractive and vice versa. A good example would be 2022. Gold dropped 20% because we had the fastest hiking cycle in a while
2. Dollar Gold:
Dollar gold isn't really a gold trade at all. It is purely a currency trade. Gold and DXY mirror each other. Dollar goes up, gold goes down. 2014-2015 are good examples of this.
3. Reserve Gold
Last year was the best example of this because central banks bought over a thousand tons of gold. The price of gold consequently rose about 50%. The banks can keep buying because they can print their own money. When the central banks are all buying in a coordinated fashion, nothing really else matters.
4. Fear Gold
Fear gold trades in days, not months. Look at the Russia-Ukraine war in 2022 for instance. Gold spiked for 8 days before selling off again. This is the type of gold that everyone seems to get burned on it.
Gold on the surface seems really simple. It's a metal and has use cases such as jewelry, tech, machines, etc but is quietly running the world economy and trade. What are yalls thoughts and comments about any of this?