Understanding the Rise and Recent Fall in Gold Prices

Apollo Chief Economist

Our chart book (available here) looks at why gold prices have increased so much since 2022, and why they have declined more recently.

Reasons why gold prices started going up in 2022:

  1. Central bank buying driven by de-dollarization because of sanctions when Russia
    invaded Ukraine
  2. Worries about US inflation
  3. Strong retail demand in India and China accelerated the upward trend

Likely reason why gold prices have declined recently:

  1. Investors needed liquidity as they experienced losses elsewhere in their portfolios
The relationship between gold prices and real long-term interest rates broke down in 2022 when Russia invaded Ukraine and EM central banks started diversifying away from the dollar
Sources: Bloomberg, Macrobond, Apollo Chief Economist

Download high-res chart book

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