By Rocco Clayfield, trading as GoldPaid; the business incorporated as GOLDPAID LTD (company 17382540) on 5 August 2026 · Published · updated
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1. The US dollar
Gold is priced in dollars globally. A weaker dollar typically makes gold cheaper for buyers in other currencies, which tends to lift demand and the dollar price. The opposite holds for a strong dollar. UK sellers feel this indirectly through the pound-dollar exchange rate. Where all seven land on any given morning is a single number that moves with the market, set out on the gold price and selling by post.
2. Real interest rates
Gold pays no interest, so it competes with interest-bearing assets. When real (after-inflation) yields fall, the opportunity cost of holding gold falls and demand tends to rise. Real yields rising tends to be a headwind for gold.
3. Central-bank demand
Central banks have been net buyers of gold for over a decade, with notable pickups in recent years as some have diversified reserves away from the US dollar. This is a structural source of demand that can absorb a meaningful share of new supply. It has not always run this way: through the 1990s the official sector was a persistent seller, which is most of the reason the price bottomed in 1999, as set out in what gold was worth in 1980, 1990 and 2000.
4. Jewellery demand
India and China account for the bulk of global jewellery demand. Indian wedding-season buying and Chinese festival demand are seasonal forces well known to the trade. UK jewellery demand is comparatively small but participates in the same market.
5. Mine and recycled supply
Mine supply grows slowly and is dwarfed by above-ground stocks. Recycled supply, including the postal-buyer market, also feeds the system. Sharp moves in scrap supply tend to track the gold price itself, with more recycling at higher prices.
6. Geopolitical risk
Gold has a long history as a safe-haven asset during war, financial-system stress or major political shocks. Spikes during such events are common but often partly reverse once the immediate fear passes.
7. Investment flows
Gold ETFs and futures positioning can move the price meaningfully in the short term, especially when sentiment shifts quickly. Watching ETF holdings is a common shorthand for tracking professional investor sentiment towards gold.