VIEWS: 18 PAGES: 3 POSTED ON: 8/31/2010
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: ? 1. Dollar 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. ? 4. Inflation 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 inevitably frustrated. ? 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.
"Eight factors affecting the price of gold"