Gold price: the factors that move it and how to read it

How gold is quoted

The world reference price of gold is in dollars per troy ounce, the historical unit of measurement for precious metals: a troy ounce weighs 31.1035 grams, not 28.35 like the common ounce. The wholesale market is London, where bars of about 12.5 kg are traded for immediate delivery (spot), and the New York futures market, COMEX, where contracts of 100 ounces are traded.

Twice a day the market gives itself a reference price: in London with the LBMA price auctions, at 10:30 and 15:00 local time, and in parallel FT Mercati with its own Fixing preziosi, calculated at the same times (11:30 and 16:00 in Italy) as the mean of two spot prices sampled 30 and 60 seconds after the start of the auction. The LBMA prices are licensed benchmarks; the Fixing preziosi FT Mercati are independent indexes that our subscribers can cite freely in contracts.

In Italy gold is traded in euro per gram: the price is obtained from the dollar value per ounce, converted into euro at the spot exchange rate and divided by 31.1035. This is why the gold price in euro can rise even when the dollar ounce is flat: all it takes is a stronger dollar.

Real interest rates and central banks

Gold pays neither interest nor dividends. When real rates, that is interest rates net of expected inflation, are high, holding gold costs in terms of forgone yield and the price tends to fall; when real rates fall or turn negative, gold becomes attractive again and rises. It is the most stable relationship of recent decades: expectations about Federal Reserve decisions move gold more than any mining data.

Inflation matters too: gold is the classic protection against the loss of purchasing power of currencies, but it works above all when inflation surprises and central banks fail to counter it with rates. If central banks raise rates by more than inflation, gold suffers despite rising prices.

The dollar

Gold is quoted in dollars, so a weak dollar makes gold cheaper for those buying in other currencies and supports its price; a strong dollar does the opposite. For the Italian market the effects add up: the price in euro per gram rises if the dollar ounce rises or if the dollar strengthens against the euro, and falls in the opposite cases. In the years when gold hit its highs in dollars and the dollar was strong, the euro price set even sharper records.

Central bank purchases

Since 2022 central banks have become the buyer that makes the difference: according to the World Gold Council, net purchases exceeded 1,000 tonnes a year in 2022, 2023 and 2024, roughly double the average of the previous decade. The buyers are above all the central banks of emerging and eastern European countries, China, India, Turkey, Poland, diversifying their reserves and reducing their dependence on the dollar after the financial sanctions of 2022.

This demand is not very sensitive to price and tends to support the market in downturns: when investors sell, central banks often keep buying. It is one of the reasons why gold held up in the years of high rates and then took off again.

Investors, ETFs and futures

Financial flows are the fastest factor. Physically backed gold ETFs buy and sell bars following investor subscriptions; COMEX futures and options amplify short-term movements through leverage. The positions of speculative funds, published every week by the CFTC, help to understand whether a rally is supported by physical buying or only by short-term bets.

In crises of confidence, whether financial, geopolitical or monetary, gold is the safe haven with no counterparty risk: there is no issuer that can fail. The 2008 crisis, the European debt crisis of 2011, the 2020 pandemic and the tensions of the years 2024-2026 each produced a rush into gold.

Jewellery, industry and supply

Jewellery absorbs about half of world physical demand and has its leading markets in India and China, where gold is also a form of saving: the wedding and festival season in India and the Chinese New Year drive retail purchases. Technology, electronics and contacts, weighs little in volume but is stable.

Supply is rigid: world mine production is around 3,600 tonnes a year and changes slowly, because a mine takes years from discovery to production; recycling, around 1,200-1,300 tonnes, is elastic instead and increases when the price rises, because more scrap gold comes back to the market. All the gold ever mined still exists, more than 200,000 tonnes: this is why the price is a matter of demand and confidence, not of mining scarcity.

The history of the record highs

Gold passed 1,900 dollars per ounce in September 2011, at the height of the European debt crisis, then lost almost half its value over the following five years, with US rates rising and the dollar strong. It reached a new high of around 2,075 dollars in August 2020, during the pandemic, and from 2024 it strung together records: more than 2,700 dollars in 2024, more than 3,000 in 2025 and, in October 2026, the Fixing preziosi FT Mercati passed 4,100 dollars per ounce.

The lesson of the historical series is that gold alternates long periods of rising with long periods of decline or stagnation, and that the highs come when several factors add up: falling rates, a weak dollar, central banks buying and a crisis pushing investors towards the safe haven. When one of these fades, the market slows.

How to read gold price forecasts

The big banks publish price targets at twelve months and beyond, which the news reports every week. They should be read for the assumptions they contain, rates, the dollar, central bank purchases, rather than for the final number: a forecast of 4,500 dollars that assumes three rate cuts holds only if the cuts arrive. FT Mercati publishes no forecasts of its own on gold: it reports those of analysts in its market news and makes the data available to assess them.

For those who buy and sell metal, the day's reference matters more than forecasts: a public fixing, verifiable and available at the right time, to be used in price lists, valuations and contracts with customers and suppliers.

Carats, fineness and conversions

The market price refers to fine gold, fineness 999, that is 24 carat. Jewellery is alloyed: 18 carat means 18 parts of gold out of 24, fineness 750, 75% fine gold; 14 carat is fineness 585; 9 carat fineness 375; 22 carat fineness 916, used for some coins, such as the sovereign and the Krugerrand, and in Asian and Middle Eastern jewellery. The value of the metal contained is obtained by multiplying the per-gram price of fine gold by the fineness: with fine gold at 110 euro per gram, a gram of 18-carat gold contains 82.50 euro of gold.

The conversions: price per gram = price per ounce divided by 31.1035; price per kilo = price per ounce multiplied by 32.1507. The buying or selling price of an object is another matter: whoever sells scrap gold receives the value of the fine gold less a margin; whoever buys bars and coins pays a premium over the fine price that grows the smaller the bar or coin.

The gold price on FT Mercati

FT Mercati calculates the Fixing preziosi for gold twice a day, in the morning and in the afternoon, at the times of the London auctions, and publishes them in dollars, euro and sterling per ounce and in euro per gram and per kilo. On the site you will find the previous session's fixings, with the value by carat and the chart of the last three months; subscribers have the day's fixings as soon as they are calculated, the real-time spot price and the full history, on the web and in the app, together with silver, platinum and palladium and all the LME metals.