What are the factors that affect the price of gold?
- Supply and Demand
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The simplest factor is that almost all commodities are the same, and there are price fluctuations, but the global supply of gold is small, and the global reserves are basically clear, so there is no new supply, and the impact of supply and demand on the price of gold is also very weak.
- Important stock markets
The price of gold moves in the opposite direction of the state of the economy and the stock market. The reason is that many investors are optimistic about the future economic development prospects and expect the stock market to have a clear trend. Most people will choose to invest their funds in the stock market, so the price of gold will inevitably be affected.
- Dollar Trend
When the dollar weakens, the price of gold will rise. This probability accounts for more than 80%. When the dollar rises, the price of gold will fall. Therefore, to predict the trend of gold, changes in the exchange rate of the US dollar have important reference value.
- The global financial crisis
History tells us that when the economic and financial systems of major Western countries such as the United States are unstable, the global capital will be invested in the safe-haven tool – gold, and the demand for gold will increase, and the price will rise accordingly. For example, during the 2008 financial crisis, the price of gold rose all the way.
- Inflation
Gold is widely believed to be a store of value. When inflation occurs, the purchasing power of the currency decreases, the money becomes worthless, which makes people very uneasy, and the interest rate cannot keep up with the price increase, so gold will be sought after.
war and unrest. In the event of wars and turmoil, economic development will be greatly restricted or even reversed. Insufficient supply of commodities will lead to currency devaluation and inflation. In order to preserve value, investors will flow to buy gold in large quantities, and the demand for gold will increase, which will cause the price of gold to rise.
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