What moves the gold price

• US dollar — A stronger US dollar makes gold more expensive for foreign buyers, pushing the price down, while a weaker dollar lifts gold.
• Real interest rates — When real yields (interest rates minus inflation) fall, gold becomes more attractive because it pays no yield, pushing the price up.
• Inflation — Rising inflation erodes the value of paper currencies, driving investors to gold as a store of value and pushing the price higher.
• Central-bank buying — Central banks, especially in emerging markets, have been net buyers of gold in recent years, providing a steady bid under the market.
• Safe-haven demand — Geopolitical tensions, financial crises, or sharp equity sell-offs drive investors into gold as a safe haven, spiking the price.

How the main drivers interact

Gold's price is ultimately a tug-of-war between the US dollar and real interest rates. When the dollar strengthens and real yields rise, gold tends to fall because it becomes less attractive relative to interest-bearing assets. When the dollar weakens and real yields fall, gold rises.

Inflation and central-bank buying add longer-term support. Even if the dollar is firm, persistent inflation or heavy central-bank purchases can keep gold bid. Safe-haven demand is the wildcard: it can override all other drivers for days or weeks during a crisis.

What an Australian trader should watch

Australian traders should watch the US Dollar Index (DXY), US Treasury yields (especially the 10-year real yield), and the latest inflation data. The Federal Reserve's policy statements are the single most important event for gold, so mark them on your calendar.

Also monitor the AUD/USD exchange rate because it affects your profit and loss in Australian dollars. A strong Australian dollar reduces the A$ value of gold gains, while a weak Australian dollar amplifies them. Use the pip value calculator to see the exact impact.

How to trade the moves inside a fixed risk

The key is to size your position so that a stop-loss at a logical level, such as below a pivot support or above a resistance, risks only a fixed percentage of your account. Use the position size calculator with the current XAU/USD price and your stop distance in pips or dollars.

For example, if you expect gold to rise on a weak US dollar, you might enter near a pivot support level with a stop just below it. The calculator will tell you how many lots to trade so that the loss if stopped is within your risk tolerance. Never let a news event turn a small loss into a large one by trading without a stop.