Do gold reserves affect the gold price

10.30 a.m. in London. The gold price is set in an electronic auction. A dozen banks from all over the world take part. In the afternoon at 3 p.m. the game repeats itself. Because how much an ounce of fine gold is worth does not depend solely on supply and demand on the international stock exchanges. In order for investors, companies, banks and mining companies to trade with one another, they need - in addition to the price on the stock exchange that changes every second - a fixed value. In the past, representatives of five major banks in London still used the phone themselves for the "gold fixing", but in 2015 the procedure was relocated to an electronic platform following allegations of manipulation.

When a country's currency depreciates due to political unrest or economic crises and fears of inflation increase, investors still expect security from gold. A herd instinct sets in: More and more people are investing in the precious metal, demand is increasing - and with it the price of gold. But there are a number of other factors that influence the price of gold:

  • The higher the current interest rate, the worse it is for the gold price. In times of high interest rates, investors are more likely to invest in stocks or other securities. After all, the precious metal does not generate any interest, the other investments are then more worthwhile: Conversely, low interest rates can be an indication of a rising gold price.
  • The central banks of the world hold gold reserves themselves, the German Bundesbank alone owns around 3,400 tons of gold. If the banks were to sell part of their assets again, the price would fall because suddenly there would be a lot more gold available on the market than before.
  • Since gold is traded in US dollars on the international stock exchanges, the exchange rate of the dollar is relevant for the gold price. A weak dollar can drive the gold price up, a strong dollar can depress the value of the precious metal.
  • Gold owners should keep an eye on the behavior of large investors. With the help of so-called Exchange Traded Commodities (ETCs) or certificates, investors can invest directly in commodities without actually having to physically buy the gold - and they can invest their money in a large number of markets at the same time. Often the gold is physically deposited by the issuer as security. "The ETCs publish their current holdings every day, you can get information from news agencies like Reuters or Bloomberg. If the ETCs sell a lot of their gold, the gold price is more likely to fall," says Michael Blumenroth, an analyst at Deutsche Bank.
  • For the price development it is also important how much gold is actually extracted in the mines. "The annual balance sheets of the major gold producers offer good indications for this," advises Blumenroth. These are usually available on the websites of the relevant companies, such as the Australian gold miner Newcrest Mining, under "Investor Relations".
  • The price is also influenced by the jewelry industry: According to Deutsche Bank analyzes, it is responsible for around half of global demand. India used to be the number one when it came to buying gold. Especially with the start of the wedding season in autumn, the gold price soars regularly - gold jewelry is a popular wedding present in India. China has now replaced India as the largest buyer.

However, all factors can only be hints - and never a guarantee: "If you ask analysts for an assessment at the same time, opinions vary from 'the gold price will explode in the future' to 'gold is really out of breath' . Even supposedly reliable forecasts should therefore be viewed critically, "says Christian Urban from the North Rhine-Westphalia consumer center. Nobody can know how the gold price will change in the coming months.