How Real Interest Rates Drive Gold (Infographic)

By Frank Holmes, CEO and Chief Investment Officer of U.S. Global Investors: Gold seems to be sparking more attention these days, as investors have seen the precious metal steadily rise from its December low of around $1,200, to a new high of $1,350 just three months later. The media has been focusing on the conflict in Ukraine and Russia as the main driver for gold, but I think an equally important driver relates to real interest rates. For gold, the real fuel lies in negative-to-low real rates of return.

Investors can watch out for two factors to see if the embers still spark for gold. Take a look at what happened over the past year with real interest rates and gold: