What are the main drivers of gold price?

Abstract: This research paper revolves around the world’s oldest financial asset, gold, and whatdrives its price, which is of importance for all investors looking to be exposed to gold.The aim of this paper is to identify the main drivers behind the gold price, whichis done by performing a multiple linear regression analysis on the gold price and aset of explanatory variables. The results show that the real yield, measured as theTIPS-rate, has the largest impact on the gold price, followed by the inflation rate.The conclusion that is drawn in the paper is that it is reasonable that the real yield isthe main driver of the gold price, because the higher the real yield, the less attractiveit becomes for investors to own gold, as it is not an interest-bearing asset.