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I've noticed gold getting a lot more attention and I'm trying to understand what is actually driving the move. Is it mainly inflation, interest rates, central-bank buying, geopolitical uncertainty, or investors looking for a safe-haven asset? For anyone who follows commodities closely, what indicators do you watch when trying to understand where the gold price could go next?
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The central bank buying is the part most people underestimate. Emerging market central banks have been reducing dollar reserve dependency for years and gold is the primary beneficiary. That is structural demand that does not disappear when interest rates move. It is the floor under the price regardless of what the Fed does.
I watch real yields mostly. When inflation-adjusted Treasury yields are negative or falling gold tends to run. When real yields rise gold struggles. Right now with nominal rates held high but inflation still above target the real yield environment is complicated which explains why gold corrected from $5,595 to $4,053 before recovering. The moment the Fed pivots even slightly that picture changes fast.