Eight factors affecting the price of gold
Eight factors affecting the price of gold
?Changes in gold prices, most of the reasons is subject to supply and demand of gold
itself. Therefore, as a principle with its own investment investors should be aware of
any possible factors that affect the supply of gold, to further understand the dynamics
inside the other investors, the trend for gold prices to forecast to invest in order to
achieve a reasonable purpose. The main factors include the following:
Although there is no gold dollar as stable, but it is higher than the mobility of gold
is much better. Therefore, the dollar is considered the first category of money, gold is
the second category. When the uncertain international political te nsions, people will
buy in anticipation of higher gold prices and gold. But most people remain in their
own hands, the currency is U.S. dollars. If the country during the war need to buy
weapons from its country or other supplies, also short selling in the hands of gold, in
exchange for U.S. dollars. Therefore, when political instability and gold will rise, but
also the U.S. dollar. In short, strong gold on the weak U.S. dollar; Huang Jinjiang on
the weak dollar.
Investors are usually guaranteed savings, the house will take the gold dollar, U.S.
dollar will take care of gold. Gold, while not legal tender, but always have their value,
not depreciate as scrap metal. If the strong dollar, U.S. dollar investment opportunities
for large, it is natural to chase dollars. On the contrary, when the dollar weaker in the
foreign exchange market, the gold price will become stronger.
2. Period of war and political turmoil
Period of war and political turmoil, economic development will receive a
significant constraint. Any local currency may depreciate because of inflation, this
time, the importance of gold to play out on the most vividly. As gold is an
internationally recognized medium of exchange, in this moment, people are turning to
gold. On the gold rush, causing the price of gold will inevitably rise.
But there are other factors common constraints. For example, in 89-92 years, the
world has witnessed many wars and political instability and sporadic, but the gold has
not made up. The reason is that all holders of U.S. dollars, give up the gold. Therefore,
investors should not apply the machinery of war factors to predict the price of gold,
but also the U.S. dollar and other factors.
3. World financial crisis
Should there be a world-class bank collapses, gold will react? In fact, this situation
occurs because of a crisis situation. People naturally will keep money in their hands, a
large number of runs on banks or bankruptcy. Situation as long ago as
Argentina&#39;s economic crisis, the country&#39;s people must exchange
dollars from the bank, while the country&#39;s investment opportunities in order
to retain the final, against the dollar&#39;s exchange, which occurred in constant
turmoil, the country plunged into a panic.
When the United States and other Western powers of financial system instability,
the world will invest in gold funds, gold demand, gold which will rise. Gold in time to
play safe haven function. Only in the financial system is stable, the investment
community&#39;s confidence in the gold and sell gold cause gold decline.
We know that a national currency of purchasing power, is determined by the price
index. When a country&#39;s price stability, the purchasing power of its
currency more stable. On the contrary, the higher the inflation rate, the more weak
purchasing power of money, the more the currency less attractive. If the United States
and major regions of the world price index remained stable, cash will not be devalued,
but also interest income, is bound to become the first choice for investors.
Conversely, if severe inflation, holding cash is no guarantee, interest charges are
also not keep up with soaring prices, people will purchase gold, because the theory at
this time gold prices rise with inflation. Major Western countries, higher inflation, in
order to preserve and increase the demand of gold for the greater, the higher will be
the world&#39;s gold. One, the U.S. inflation rate is about the most likely
changes in gold and some smaller countries, such as intelligence, Uruguay, the highest
annual inflation can reach 400 times, but then no effect on gold.
5. Oil prices
Gold itself is under inflation hedge products, with U.S. inflation inseparable. Oil
prices means that inflation will follow, gold will follow up.
6. Local interest rates
Investing in gold does not earn interest, the profitability of their investment
depends prices. Low interest rates, the measure of under investment in gold would
certainly benefit; but interest rate rises, interest charges will be more attractive,
interest- free investment value of gold will drop, since the greater the opportunity cost
of gold investment, than on the banks to charge interest on it more stable and reliable,
especially when U.S. interest rates rise, the dollar will be a lot of absorption, gold will
Interest rates are closely linked to gold, if a higher national interest, we must
consider whether it is worth the loss of interest income to buy gold.
7. Economic conditions
Economic prosperity, the people living at ease, naturally enhancing
people&#39;s desire to invest, buy gold to hedge or civil decorations will be in
much increase in price of gold will get some support. On the contrary, under times of
hardship, the Depression, people with food and clothing can not meet basic security,
but also where there is gold investment interest then? Gold is bound to decline.
Constitute the economic situation is also a factor in the gold price fluctuations.
8. Gold supply and demand
Gold is based on supply and demand for, and if a substantial increase in gold
production, gold will be affected and down; Dan Zhang Shijian miners if
there&#39;s a strike Dengyuanyinshi Tingzhi increase production, gold demand
was outstripping supply Jiuhui appreciation of the case. In addition, the new gold
mining technology, the discovery of new mines are made of gold supply increased,
reflected in the price of gold will fall of course. A local investment in gold is also
possible the wind study, for example, there&#39;s gold in the investment boom
in Japan has greatly increased, and resulted in prices climbing.
The basic analysis for the gold trend has many aspects, as we have in the use of
these factors yes, 就 到 should consider the strength of their respective Zuoyong
have much in the end. Find the status of each factor and impact of primary and
secondary time to make the best investment decisions.
The basic analysis of gold in the time period is divided into short-term (usually
three) factors, and long-term factors, we were treated to their influence.