Gold: What’s Really Driving the Price?
When it comes to gold, it’s not macro fundamentals calling the shots right now — it’s the flows. And central banks, not retail investors, are leading the charge.
Gold’s always been a bit of a shapeshifter. Some see it as an inflation hedge, others as a safe haven. For many, it’s an alternative to the Dollar or interest-paying government bonds.
At eyeQ, our smart models take all those views into account — inflation expectations, risk appetite (like the VIX), the US Dollar and real yields. Right now, those factors point to a fair value of $2,906 — the level gold should be at given current macro conditions.
Our model’s fair value (the orange line) has been trending higher for months, showing solid macro support for higher gold prices. But after the recent dip, gold now trades 1.9% below fair value — a slight discount, but nothing extraordinary.
For gold bugs, though, there may be better value elsewhere. Gold mining stocks, like Newmont, screen as far cheaper — currently 13% below fair value based on macro conditions.
One last, and critical, point: check the macro relevance score in the bottom chart. A high number here means macro drivers dominate, and our signals are stronger. A low number suggests flows (like central bank buying) are more influential.
The tipping point is 65%. Above that, macro rules. Below it, you’ll want to dig into those other drivers like ETF flows or central bank stockpiling. Right now, that’s where the story is.
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