Since ancient times, gold has become the international currency since the formation of the world economic system.
At present, gold is used by most countries in the world as an international reserve asset and the ultimate means of value storage.
In times of high inflation and political and economic crisis, gold’s value increases even more.
Therefore, there are many factors that affect the international market. For example, the change of gold supply and demand has a direct impact on the rise and fall of the market price.
In general, he said, in periods of limited supply, high demand and short supply, the international gold market will rise.
If not, gold prices will fall.
2. Economic factors also have a great impact on the international gold market price.
The influence of world economic cycle development trend.
Typically, in times of economic crisis or “recession”, profit margins fall to a minimum and people lose confidence in the economic outlook, so they sell paper money to buy gold as a store of value.
In addition, the impact of changes in the comparative relationship between inflation rate and interest rate.
In general, he says, inflation invisibly devalues the money people hold.
When the interest income is not enough to offset the loss caused by inflation, people will lose confidence in paper money, and they will think it is safer and safer to hold gold than paper money. The demand for gold will increase.
The impact of changes in oil prices.
Oil has always been priced in dollars.
If the price of oil rises, the value of the dollar falls, which in turn causes people to sell paper money and buy gold as a hedge, spurring gold prices higher.
3. Political situation and sudden major events also have a certain impact on the gold price in the international gold market.
Gold is a very sensitive speculative commodity, any political, economic turmoil, will be reflected in the gold price of the international gold market.
In November 1979, for example, Iran stopped selling oil to the United States after relations between the United States and Iran deteriorated.
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