What moves gold and metals prices: investment vs industrial demand

Video explainer · Commodities & Gold · Summary written by UXS November 10, 2026

Video by CME Group on YouTube (2:50, uploaded April 6, 2018). Embedded with the official YouTube player; UXS did not make this video. Watch on YouTube

Our summary

CME Group looks at metals from a fundamental analyst's point of view.

  • Two kinds of demand: investment demand and industrial (manufacturing) demand. Gold has both: it is held as an investment and used in jewelry and electronics. Copper has very little investment demand but heavy industrial demand, so analysts watch construction activity instead.
  • Growth and inflation: in a fast-growing economy with rising inflation, gold investment demand may rise as an inflation hedge, and industrial demand may rise too.
  • Mixed signals: in a contraction, investment demand for gold may rise as stocks weaken, while industrial demand falls. Analysts have to weigh both.
  • Supply is different for metals: metals are not used up, so supply comes from existing stockpiles and recycling as well as new mining, which reduces dependence on new production.

Our take: this framework explains why silver, with more industrial use, often behaves differently from gold. See our gold and gold/silver ratio chart.