Interest rates inversely affect gold opportunity cost: when rates are 1.5%, holding gold has low opportunity cost; when rates are 5-7%, opportunity cost of holding gold rises significantly, reducing its attractiveness.
causalpending
Speaker
Aswath DamodaranEvidence Quote
“When interest rates got to 1 1/2% in the last decade, you could hold gold and really not face any real opportunity cost. Whereas if interest rates are 5, 6, or 7%, you're giving up more by holding on to gold.”
Source
Aswath Damodaran: I Am More Cautious Than Ever— The Master Investor Podcast with Wilfred FrostCreated: 8/12/2026, 6:41:25 PM
My Notes
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