Why does the gold price change?

Where the gold price comes from

There is no single gold exchange. The price you see is the result of continuous trading in London's over-the-counter market, futures on COMEX in New York and the Shanghai Gold Exchange, among others. Twice a day the LBMA Gold Price auction in London sets a benchmark used in many contracts. Live price services such as MetalflowAPI, which powers this site, aggregate market quotes into a spot price per troy ounce. Our methodology page explains how we convert that to grams and karats.

Gold trades almost 24 hours a day on weekdays, so the price moves continuously. Over the weekend markets are closed and the last price stays fixed until trading resumes in Asia on Monday morning.

Real interest rates

Gold pays no interest or dividend. When interest rates after inflation — real rates — are high, holding gold means giving up a meaningful return elsewhere, and investors tend to sell. When real rates are low or negative, the cost of holding gold falls and demand rises. This relationship has historically been one of the strongest drivers of the gold price, which is why central bank decisions and inflation data often move gold within minutes of their release.

The US dollar and your local currency

Gold is priced internationally in US dollars. When the dollar weakens, gold becomes cheaper for buyers using other currencies and demand tends to rise, pushing the dollar price up. For sellers in Europe or the UK there is a second effect: even if the dollar price of gold stays flat, a move in EUR/USD or GBP/USD changes the price per gram in euros or pounds. That is why our price charts let you switch currency — the shape of the chart can look quite different in EUR, USD and GBP.

Inflation and currency debasement

Over long periods gold has tended to keep its purchasing power, so investors buy it as a hedge when they expect inflation or worry about government debt and money printing. The relationship is not reliable over months or even a few years — gold fell in the early 1980s despite high inflation because real rates were very high — but over decades it is the main reason many people own it.

Central banks

Central banks hold large gold reserves and, since 2010, have been net buyers. In recent years purchases by central banks in emerging markets, notably China, Poland, Turkey and India, have reached record levels as they diversify away from the dollar. Because these purchases are large and steady, they put a floor under demand. Announcements of official buying or selling can move the market.

Crises and safe-haven demand

Gold is seen as a safe haven. Wars, banking crises, pandemics and sharp stock-market falls often bring a rush into gold and gold-backed funds. The price reaction can be sharp but is sometimes short-lived; when the immediate fear fades, some of the gains are given back. Very occasionally gold falls at the start of a crisis, as in March 2020, because investors sell whatever is liquid to raise cash.

Jewellery, industry and mine supply

Jewellery accounts for roughly half of annual gold demand, led by India and China, and is very price-sensitive: when prices jump, jewellery buying falls and scrap selling rises. Industrial use, mainly electronics, is a small share. On the supply side, mine production grows slowly because new mines take a decade or more to develop, while recycled gold — including the scrap jewellery people sell — makes up around a quarter of supply and responds quickly to price.

What this means if you are selling scrap gold

Short-term moves are impossible to predict consistently. Professional traders with far more information get it wrong all the time. For a private seller, the difference between a poor and a good buyer — often 20 to 30 percentage points of melt value — is far larger than a typical weekly price move. Get a fair payout first; worry about timing second.

If you do want to watch the market, look at the 1-year and 5-year charts and the yearly summaries, such as the gold price in 2025, to put today's price in context. Then use the scrap gold calculator with the live price on the day you sell.

Silver, platinum and palladium

Silver follows gold broadly but swings more, because about half its demand is industrial. Platinum and palladium are dominated by car catalysts and can move independently of gold. See gold vs silver for how the two compare as stores of value.

Reading the daily price like a professional

Professional dealers look at a few things before quoting: the overnight move in Asian trading, the London morning price, the EUR/USD and GBP/USD exchange rates and the economic calendar for the day. Big moves tend to cluster around US inflation and jobs data, central bank meetings and unexpected political news. On quiet days, gold may move less than half a percent; on busy days, two or three percent is possible within hours.

For a seller, the practical lesson is simple. Check the live price on the morning you sell, collect your quotes within a few hours of each other, and compare each quote with the melt value at that moment rather than with a price you saw last week.