Commentary: Why Has Gold’s Inverse Relationship With the Dollar Reversed?

The price of gold has long had a close relationship with real interest rates of the U.S. dollar: higher real interest rates in the U.S. — which usually mean a stronger greenback — lead to lower gold prices, and vice versa.

However, this correlation seems to have weakened. Over the past four years, gold prices have been rising, despite the dollar remaining relatively stable. One of the driving forces behind this change is the gold-buying spree by central banks.