Video narration
Why can the gold price fall when interest rates rise? Think about your bank savings account. If the interest rate rises, leaving money there becomes more attractive: you earn more without holding gold. Gold pays no interest or dividends. When savings accounts or bonds offer more, choosing gold means giving up that extra return. That lost alternative is the opportunity cost. So higher rates often put downward pressure on gold. But rates do not mechanically set the gold price. Inflation matters. The real interest rate-what you actually earn after inflation-can still be low. Fear, the dollar, and investor demand can overpower the usual pattern. Gold can rise even when rates are high. So why can the gold price fall when rates rise? Because higher rates make interest-paying assets more attractive, raising gold's opportunity cost. They create pressure, not a price rule; inflation, fear, and the dollar can win.