While gold’s limited availability has historically contributed to its price performance, other factors can — and do — affect the general demand for the precious metal.

High interest rates and overvalued stocks resulted in market volatility in 2023, and as one of the recent periodic U.S. Money Reserve reviews of the U.S. economy’s status pointed out, analysts have forecast possible further stock market instability.

High interest rates have also increased foreign entities’ interest in purchasing U.S. Treasuries, drawing a significant amount of money into the U.S. and driving the value of the U.S. dollar up, according to U.S. Money Reserve President Philip N. Diehl, who previously served as the 35th Director of the U.S. Mint.

Gold purchasing has slowed a bit as a result, Diehl says, but he adds that will likely be temporary.

“Gold is sold, worldwide, in dollars,” he says. “An exceptionally strong dollar, like we have today, makes gold expensive for foreign buyers, which puts a cap on demand in those markets. At some point, soon I think, we will see the value of the dollar begin to fall, and when that happens, I expect gold demand to rise and prices to continue their recent acceleration.”

Traditionally, gold has had an inverse relationship to stocks; when the market goes down, a number of portfolio holders look for less volatile assets, such as gold.

In one of the U.S. Money Reserve reviews from clients the company has shared on its website, Craig, a Florida-based portfolio holder, says he incorporated precious metals into his savings plans after previously focusing on stocks.

“Gold and silver, precious metals, are going to hold their value and increase,” Craig sa ys. “Precious metals, as a foundation, it’s solid; it should give you confidence, and that’s what you need in your portfolio.”