Real Interest Rates & the Dollar

Chapter 1 argues that gold's price tends to move less on headlines than on two quieter variables: what it really costs to hold cash instead of gold, and what a dollar is worth. The first is on the panel above, live, alongside two broad commodity indexes for context; the dollar side is told better as a table than a chart — see below.

Why the real rate matters

Gold pays no coupon and no dividend. Holding it instead of a Treasury bond has a cost — the yield you give up. But it's not the yield printed on the bond that matters; it's that yield after inflation. When inflation erodes the return on cash and bonds faster than the nominal yield compensates for, the real cost of holding gold tends to fall — and gold has tended to respond. When real yields rise, as they have through much of 2026, that opportunity cost rises with them, which is the headwind side of the same relationship.

The middle line above is the US 10-year yield on Treasury Inflation-Protected Securities (TIPS) — the market's own running estimate of the real rate, rather than a model of one.

Why the commodity indexes are there too

The third and fourth lines are two broad commodity indexes (energy, industrial and agricultural commodities together, not just metals), shown through the funds that track them. DBC follows an energy-heavy index of 14 commodities; BCI follows the Bloomberg Commodity Index, where no sector may exceed a third of the weight. Two reference points rather than one: the truth about “commodities” usually sits somewhere between them. It's on the panel to answer one question: is gold moving because commodities generally are moving — a demand or inflation story — or is gold moving on its own, decoupled from the broader complex? Gold rising while the index doesn't tends to point toward the monetary and confidence story this page is about, rather than a commodity supercycle.

US Dollar Index (DXY), live

The US Dollar Index (Capital.com's DXY feed, which tracks the ICE index; TradingView does not allow the ICE feed itself in embedded charts), daily, with the Ichimoku cloud on price and RSI (14) below. Change the timeframe in the chart's toolbar. If the chart does not load, open DXY on TradingView.

Why the dollar matters

Gold is priced globally in dollars. A weaker dollar tends to make gold cheaper for buyers holding other currencies, which has tended to support demand independent of what's happening to rates; a stronger dollar tends to work the other way. The two forces don't always point the same direction — a rate hike that also strengthens the dollar can squeeze gold from both sides, while a rate hike that comes with dollar weakness (a divergence worth watching for) can leave gold closer to unmoved than either variable alone would suggest.

The chart above shows the index itself: about 58% euro, then the yen, the pound, the Canadian dollar, the Swedish krona and the Swiss franc. The table below shows what sits behind the move: every ECB-tracked currency against the dollar, and gold against the dollar, across six timeframes.

Currency performance vs the dollar

Every ECB-tracked currency against the US dollar, plus gold, across six timeframes. Click a column heading to sort.

How to read the panel

All the lines are indexed to their own scale, not to each other, so read direction and turning points rather than absolute levels. A useful habit from the framework: check the real yield line first, then the two commodity indexes, then ask whether gold's actual move matches what those two would predict on their own — the gap is often the more interesting story, and is usually where the dollar or a confidence shock is doing the rest of the work.