Question
What is the underlying value for gold?
A. Unlike stocks or bonds, gold does not generate income, meaning its intrinsic value cannot be calculated through conventional cash flow valuation.
Instead, its value is supported by scarcity, physical demand and its role as a store of wealth. Gold prices are influenced by real interest rates, inflation expectations, currency depreciation, central bank purchases and geopolitical uncertainty. Lower real interest rates generally make gold more attractive because the opportunity cost of holding a non-yielding asset decreases.