2.2 Why Gold & Silver Prices Move: Precious Metals Explained

What gold is, who holds it, the four reasons its price moves, and how silver, platinum and palladium differ, with the times each price moves in IST.

  • 2.2
  • 11:50
YouTube

About this lecture

What is gold, who holds it, and why does its price move? A simple lecture for Indian traders and investors on the precious metals.

In this lecture, Pratham lays out the four drivers of the gold price and what sets silver, platinum and palladium apart from it.

You'll learn about:

  1. What gold is: every ounce ever mined still exists, priced in dollars per troy ounce and set in London twice a day
  2. Why holding gold is a trade: it pays nothing
  3. Driver 1: the cost of holding gold, real yields on FRED, and the dollar through DXY and USDINR
  4. Driver 2: fear, why gold is not a promise, and why gold can fall in the first hour of a crash
  5. Driver 3: central banks, the buyer who ignores yields, and Russia's frozen reserves in 2022
  6. Driver 4: momentum and crowding, World Gold Council ETF tonnes and CFTC positioning
  7. Silver: industrial demand and solar panels, about 70% a byproduct of other mines, and why it moves more than gold
  8. Platinum and palladium: the catalytic converter metals, substitution, and the supply risk in South Africa and Russia
  9. The clock: the London spot price, 24/7 trading, and the London gold price times in IST

Next in the module: energy, with oil and natural gas.

Educational content only. Not investment advice.

MochaLearn is a free A to Z course on understanding and trading US stocks and commodities, built for Indian traders.

Key takeaways

  1. Gold pays nothing, so holding it is a trade; its price is set in London twice a day in dollars per troy ounce.
  2. Four drivers move gold: the cost of holding it (real yields and the dollar), fear, central banks that ignore yields, and the crowd in ETFs and futures positioning.
  3. Silver is an industrial metal as much as a precious one, mostly a byproduct of other mines, which is why it moves more than gold in both directions.
  4. Platinum and palladium are the catalytic converter metals; car makers switch between them, and their supply sits in South Africa and Russia.

Quiz

  1. Real yields rise and gold rises with them. The lecture's reading?
  2. Why can gold fall in the first hour of a crash?
  3. Why does silver move more than gold?