And yet. Take a closer look, and it’s far from clear: why is gold suddenly rising right now?

After trading in a fairly steady range for months, bullion started spiking in early March. It’s risen 14% since then and left a string of daily records in its wake. But geopolitical tensions have been high for months, even years, and if anything the outlook for the timing on rate cuts by the Federal Reserve has become muddier in recent weeks. So what’s changed? 

Seasoned executives and analysts offer very different answers to who or what has driven gold to its unprecedented heights: Is it a central bank worried about the dollar’s role as an economic weapon? Funds betting that the Federal Reserve’s pivot to lower interest rates is imminent? An army of algorithmic traders drawn to gold simply because it’s going up? Stubborn inflation and worries about a hard landing? Weakening currencies? Upcoming elections? All of the above?

The mystery has sent industry insiders poking through the plumbing of a massive global trade that stretches across futures and exchange-traded funds from New York to Shanghai to a huge over-the-counter hub in London and world-spanning web of dealers selling bars, coins and jewelry to everyone, everywhere.

It’s an opaque and complex world that’s historically been hard to crack open. Still, the market and regulators have been on a years-long drive to boost transparency, increasing access to data that helps shine a little more light on the gravity-defying rally in one of the world’s oldest stores of wealth.

Who’s buying? 

First, the easy answer: central banks, in particular, as well as big institutions and traders preparing for a shift to looser rates. Chinese consumers are worried about wilting returns in other assets and a depreciating currency. On Reddit Inc.’s platform, self-proclaimed “stackers” boast of hoarding bars and coins.

But those groups have been a consistent bullish force for months — or years in the case of central banks — and it’s not clear why any one of them might be buying with a much greater sense of fear, greed, or exuberance. Analysts are armed with better market data than they’ve ever had before, and yet the cumulative answer is frustratingly vague: It’s everyone all at once, and no one in particular.

What are they buying?

One thing that’s clear is also a head-scratcher: Investors haven’t been buying exchange-traded funds, one of the easiest ways to acquire gold. A steady stream of outflows from gold-backed ETFs suggests that a major cohort is missing out — or cashing out.

“This is one of the more bizarre phenomena that I’ve ever seen in the ETF space,” said Nate Geraci, president of the ETF Store. “What’s particularly interesting is that gold demand has been very strong in other channels such as central bank purchases and direct purchases by individual and private investors.”

Profit-taking by long-term investors who bought in years ago is how Citigroup Inc. explains why net ETF inflows have been notably weak. The fact that the steady and sizable outflows haven’t had a greater impact on prices also hints at strong demand for the bars they’ve been selling — and central banks would be a natural buyer, according to Joe Cavatoni, who oversees the World Gold Council’s ETF platform.

“There are other investors who are buying the physical gold, so it is not having an impact in any way,” he said in an interview. “Guess where it goes: into the OTC market, picked up by central banks.”

Where are they buying?

In the larger futures and over-the-counter markets, trading activity is rising sharply, signaling that the usual institutional buyers — central banks, investment banks, pension funds, sovereign wealth funds — are involved. Options activity is picking up, too, and there are expectations bullion prices may vault higher still as options dealers rush to cover their exposure.

The number of outstanding contracts in New York futures has been rising, a sign that longer-term bets by money managers are on the upswing. But overall trading volume has outpaced the number of open contracts — hinting at a surge in the kind of frenetic day trading algorithmic funds excel at.

When are they buying?

Mainly on Mondays, Wednesdays, and Fridays. The gold market is famously sensitive to shifts in US economic data, and that’s become even more true since prices took off at the start of March. Key economic releases on those days offer readings on the strength of manufacturing, jobs, GDP and inflation, and a concentrated spurt of buying seen after the data provides a strong clue to the identities of the most influential actors.

But that in itself has been confounding analysts, because recent data has been coming in hot, and investors in currency and bond markets have been responding with bets that the Fed’s pivot will come later and be shallower than expected a few months ago.

In theory, that would be negative for gold because high interest rates dent bullion’s appeal relative to yield-bearing assets such as bonds. Investors also are pushing up the dollar, which has made gold much more expensive for buyers in the top consumer markets: China and India.

Why are they buying now?

That’s the big question. The glaring hole in the narrative of the past five weeks is that while the Fed is still expected to start cutting rates this year – which should benefit gold — many investors have actually become less convinced about the timing than they were a few months ago.

One possibility is that some gold investors are instead zeroing in on the prospect of a hard landing in the US economy based on the recent data, and rushing to buy bullion for its role as a haven.

That idea could also provide an explanation for another curious movement in the gold market in recent weeks – the relationship between a closely watched gold price spread and US Fed interest rates.

The percentage yield between London spot and three-month forwards – which tends to track interest rates because of the cost of storing, financing and insuring gold – has made a rare dip below Fed rates in recent weeks, as spot prices soared. Historically, that only happens on a sustained basis when rates are either low or about to move sharply lower.

The inversion of the spread may signal that nervous investors are clamoring to get hold of spot gold now, as protection against potential turmoil.

“The rally is defying a lot of normal thinking, especially when it comes to still-elevated rates,” said Ole Hansen, head of commodity strategy at Saxo Bank AS. “I think the narrative is changing towards sticky inflation and perhaps a hard landing, spiced with a lot of geopolitical uncertainty and de-globalization driving central bank demand.”