U.S. Dollar Strength: Since precious metals are priced in U.S. dollars, their prices are inversely related. A weaker dollar usually drives up metal prices, and vice versa.

Inflation & Interest Rates: Metals like gold often serve as a hedge against inflation. Lower interest rates reduce the opportunity cost of holding metals, making them more attractive.

Debt Levels & Unemployment: Economic uncertainty caused by high debt or unemployment can increase demand for safe-haven assets like gold.

Central Bank Stability: Central banks are monetary institutions controlled by the national government or private entities with government authorization. These banks hold precious metals in their reserves alongside foreign currency, bonds, and other low-risk options. They collectively own about one-fifth of all gold ever mined. Since precious metals are in constant demand and can be liquidated quickly, they serve as monetary insurance and provide stability during times of economic uncertainty. This allows central banks to loan or sell these assets to other nations without the credit risks associated with other assets and to profit during economic instability.

Quantitative Easing (QE): A monetary policy where central banks purchase large quantities of financial assets to inject money into the economy—QE encourages investment in higher-risk ventures. This is not physical money printing but digital credits added to a seller’s account. QE can either inflate metal prices (as investors seek safe assets) or depress them if investors pursue higher-risk opportunities due to improved liquidity.