The rarity of gold makes gold very precious, and the stability of gold makes gold easy to preserve. Therefore, gold has not only become mankind’s material wealth, but also an important means for mankind to store wealth. Therefore, gold has been favored by mankind. Particularly favored. What you are saying is that sometimes it is not as good as sweet potatoes. In the real society, the wealth represented by gold is like money. It is just a piece of high-quality paper, but what is the purpose of your hard work? It is not for money.

Attributes of investment products

Comparison with other investment varieties

Generally speaking, personal investment mainly includes real estate, savings, securities and precious metals. The pros and cons of these investment methods are compared as follows: ◆Real estate (value change) generally changes slightly, depending on the investment environment (liquidity/liquidity) is average, but the price depends on the location, and if you want to sell at a high price, you have to wait for the opportunity , eager to sell may result in small profits and losses (profitability) depending on changes in the investment environment and differential ground rent (maintenance costs) including property management and maintenance fees, transaction taxes ◆ Savings (changes in value) are greatly affected by inflation (liquidity/sales sex) and cash equivalent (profitable) interest, its level is affected by inflation. When inflation is high, nominal interest is also high. When inflation is low, nominal interest is also low (maintenance costs). Many countries have levied savings tax ◆ Securities (value changes ) is prone to change and has many types, mainly bonds and stocks. Its value is greatly affected by politics, macroeconomics, and monetary policies (liquidity/liquidity). High (profitability) bond profits are relatively stable, while stock profits fluctuate greatly ( Maintenance cost) There will be certain transaction costs when buying and selling, such as taxes and handling fees ◆ Gold (value change) Small value change (liquidity/liquidity) High (profitability) The profit of buying and selling real gold is low, but the risk is also low, Hyping paper gold (standard contract) is relatively profitable, but risky (maintenance costs). The maintenance cost of real gold is high, while the maintenance cost of paper gold, such as standard contracts, is low. In addition to the above comparison, investors can also compare it with the above method. Comparative analysis of gold and other investment objects, such as silver, antiques, jewelry, luxury watches, etc., can provide some useful inspiration. It can be seen that gold has the advantages of stable value and high liquidity, and is an effective means to deal with inflation. If you have certain basic knowledge and professional analysis capabilities about the futures market and gold price changes, you can also participate in gold futures investment to make profits. Generally speaking, no matter how the price of gold changes, it has a certain degree of value preservation and strong liquidity due to its relatively high intrinsic value. In the long run, it has the effect of resisting inflation; in the long run, real estate has great practicality. If the purchase time, price and area are reasonable, it also has the potential to appreciate; and savings are the most convenient to meet various immediate needs; stock profits Sex and risk exist. The advantages and benefits of these investments will depend on various purposes, financial resources and investment knowledge.

Gold Reserves

Due to the characteristics of gold being difficult to mine, high mining cost, and having good physical properties, gold has not only been used as decoration by humans during the long-term social and historical development, but also as a Given the function of monetary value. It was not until the 1970s that gold was separated from its direct monetary role, that is, gold was demonetized. But as a precious metal, gold is still the world's main international reserve. According to the gold reserves released in March 2008, the top 10 countries and international institutions with gold reserves in the world are: the United States (8133.5 tons), Germany (3417.4 tons), the International Monetary Fund (3217.3 tons), France ( 2586.9 tons), Italy (2451.8 tons), Switzerland (1133.9 tons), mainland China (1054.0 tons), Japan (756.2 tons), the Netherlands (621.4 tons), and the European Central Bank (563.6 tons). Countries with large reserves have experienced aggressive wars. Before the Opium War, China's gold reserves were the largest in the world, but the war caused the gold to disperse.

The role of currency

1. Before the 1960s, gold has been used as a medium of transaction for more than 3,000 years. After a long period of time, the gold standard system was gradually established and became the basis of the British monetary system in 1717. By the end of the 19th century, the gold standard system had been widely implemented in European countries. The United States implemented the gold standard in 1900. On the international front, gold is freely imported and exported to settle the balance of payments; gold flows from countries with a balance of payments deficit to countries with a balance of payments surplus. After the outbreak of World War I, the United Kingdom officially stopped adopting the gold standard system in 1919, but resumed the BRIC standard system in 1926; under this system, banknotes could only be exchanged for 400 ounces of internationally recognized gold bars. In the early 1930s, the world economy was in a period of turmoil, forcing most countries to abandon the system of exchanging gold for currency?] The United Kingdom in 1931 and the United States in 1933 only allowed gold trading activities between central banks and governments. . Under this circumstance, the U.S. dollar exchange system was formed so that U.S. dollars could be exchanged for gold at the Federal Reserve Board.

The international community signed the Bretton Woods Agreement in 1944, confirming this system and it was implemented until 1971. In 1934, U.S. President Roosevelt raised the official price for gold trading by the Federal Reserve to $35 per ounce. The Federal Reserve and European central banks worked hard to maintain this exchange rate until 1968. 2. During the 1960s, due to the increasing demand for gold in the free market for jewelry manufacturing and investment purposes, the United States, together with the United Kingdom, Belgium, France, Italy, the Netherlands, West Germany, and Switzerland, established a gold central bank in the hope of keeping the market price of gold close to The official price is US$35 per ounce. This new agency is actually an expansion of the External Stabilization Fund, allowing the Treasury to increase the supply of gold to suppress free market gold prices when necessary.

Price Change Factors

Before the 1970s, gold prices were basically determined by governments or central banks of various countries, and gold prices were relatively stable internationally. In the early 1970s, the price of gold was no longer directly linked to the U.S. dollar, and the price of gold gradually became market-oriented. Factors affecting changes in gold prices are increasing. Specifically, they can be divided into the following aspects: 1. Supply factors (1) Gold on Earth Stock: There are currently about 137,400 tons of gold in the world, and the stock of gold on the ground is still growing at a rate of about 2% every year. (2) Annual supply and demand: The annual supply and demand of gold is approximately 4,200 tons, and the newly produced gold each year accounts for 62% of the annual supply. (3) New gold mining costs: The average total cost of gold mining is approximately slightly less than US$260 per ounce. Due to advances in mining technology, gold development costs have continued to fall over the past 20 years. (4) Political, military and economic changes in gold-producing countries: Any political or military turmoil in these countries will undoubtedly directly affect the amount of gold produced in that country, and thus affect the world's gold supply. (5) Central bank gold selling: The central bank is the largest holder of gold in the world. In 1969, the official gold reserve was 36,458 tons, accounting for 42.6% of the total surface gold stock at that time. By 1998, the official gold reserve was approximately 34,000 tons. , accounting for 24.1% of all mined gold stocks. Based on current production capacity, this is equivalent to 13 years of world gold mine production. As the main use of gold has gradually changed from an important reserve asset to a metal raw material for the production of jewelry, either to improve the country's international balance of payments or to suppress the international gold price, the central bank's gold reserves in the past 30 years have been both absolute and relative. There has been a significant decline, and the decline in quantity is mainly due to the selling of inventory reserves of gold in the gold market. For example, the massive sell-off by the Bank of England and the preparations of the Swiss National Bank and the International Monetary Fund to reduce gold reserves have become the main reasons for the recent decline in gold prices in the international gold market. 2. Demand factors (1) Changes in the actual demand for gold (jewellery industry, industry, etc.). Generally speaking, the development speed of the world economy determines the total demand for gold. For example, in the field of microelectronics, gold is increasingly used as a protective layer; in fields such as medicine and architectural decoration, despite the advancement of science and technology, gold substitutes are constantly However, the demand for gold is still on the rise due to its special metallic properties. In some areas, local factors have a significant impact on gold demand. For example, India and Southeast Asian countries, which have always had a large demand for gold jewelry, have been affected by the financial crisis. Gold imports have been greatly reduced since 1997. According to data from the World Gold Council, gold demand in Thailand, Indonesia, Malaysia and South Korea has dropped by 71% respectively. %, 28%, 10% and 9%. According to statistics, China's current per capita gold consumption is only 0.2 grams, which is still far behind the world's largest gold consumer. The current per capita gold consumption in India is 0.85 grams, which is more than four times the per capita gold consumption in China. Judging from China's economic development and per capita income, China is much higher than India. Therefore, China has a very large potential for gold consumption and the prospects are very promising. (2) The need to preserve value. Gold reserves have always been used by central banks as an important means to prevent domestic inflation and regulate the market. For ordinary investors, investing in gold is mainly to achieve the purpose of preserving value under inflation. In an economic downturn, because gold is more secure than monetary assets, the demand for gold rises and the price of gold rises. For example: In the three U.S. dollar crises after World War II, due to the serious U.S. balance of payments deficit trend, the U.S. dollars held by various countries increased significantly. The market's confidence in the value of the U.S. dollar was shaken. Investors rushed to buy gold in large quantities, which directly led to the bankruptcy of the Bretton Woods system. . In 1987, due to the depreciation of the US dollar, the increase in the US deficit, and the unstable situation in the Middle East, the international gold price rose sharply. (3) Speculative demand. According to the international and domestic situation, speculators take advantage of the gold price fluctuations in the gold market and the trading system of the gold futures market to "short sell" or "replenish" gold in large quantities, artificially creating the illusion of gold demand. In the gold market, almost every major decline is related to hedge fund companies borrowing short-term gold to sell in the spot gold market and building large short positions on the COMEX gold futures exchange. When gold prices fell to a 20-year low in July 1999, data released by the U.S. Commodity Futures Trading Commission (CFTC) showed that speculative short positions on the COMEX were close to 9 million ounces (nearly 300 tons).

When a large number of stop-loss selling orders were triggered, the price of gold fell, and fund companies took the opportunity to cover profits. When the price of gold rebounded slightly, the hedging forward selling orders from manufacturers suppressed the further rise in gold prices, and at the same time provided funds to fund companies. New opportunities were used to re-establish short selling positions, forming a downward trend in the price of gold at that time. Gao Jin, Gaossel Gold and Silver R&D Center, said: "The current gold market price trend is not simply determined by market supply and demand, nor is it a simple game between central banks of various countries. Speculative factors also play a large role in the price. "3. Other factors (l) The impact of the US dollar exchange rate. The U.S. dollar exchange rate is also one of the important factors affecting gold price fluctuations. Generally speaking, in the gold market, when the U.S. dollar rises, the price of gold falls, and when the U.S. dollar falls, the price of gold rises. A strong U.S. dollar generally represents a good domestic economic situation in the United States. U.S. domestic stocks and bonds will be eagerly sought after by investors, and the function of gold as a store of value will be weakened; while a decline in the U.S. dollar exchange rate is often related to inflation, a downturn in the stock market, etc. Gold's value preservation Functionality is demonstrated again. This is because the depreciation of the U.S. dollar is often related to inflation, and the value of gold is relatively high. When the U.S. dollar depreciates and inflation intensifies, it will often stimulate an increase in the value preservation and speculative demand for gold. In August 1971 and February 1973, the U.S. government twice announced the devaluation of the U.S. dollar. Under the influence of factors such as the sharp decline in the U.S. dollar exchange rate and inflation, the price of gold rose to its highest level in history in early 1980, exceeding $800 per ounce. Looking back at the history of the past 20 years, if the US dollar is strong against other Western currencies, the price of gold will fall in the international market. If the US dollar depreciates slightly, the price of gold will gradually rise. (2) The monetary policies of various countries are closely related to the international gold price. When a country adopts a loose monetary policy, due to the decline in interest rates, the country's money supply increases, increasing the possibility of inflation, which will cause the price of gold to rise. For example, the low interest rate policy of the United States in the 1960s prompted the outflow of domestic funds, and a large amount of U.S. dollars flowed into Europe and Japan. As the net positions of U.S. dollars held by various countries increased, gold jewelry

worried about the value of the U.S. dollar, so they began to The market sold dollars and rushed to buy gold, which ultimately led to the collapse of the Bretton Woods system. However, after 1979, the impact of interest rate factors on gold prices has gradually weakened. For example, in 2005, the Federal Reserve cut interest rates eleven times, but it did not have a very big impact on the gold market. Only the gold market benefited from the "9.11" incident. (3) The impact of inflation on gold prices. In this regard, long-term and short-term analysis must be done, and it must be combined with the degree of inflation in the short term. In the long run, if the annual inflation rate changes within the normal range, it will have little impact on the fluctuation of gold prices; only in the short term, if prices rise sharply, causing people to panic, and the unit purchasing power of currency decreases, the price of gold will increase significantly. rise. Although after entering the 1990s, the world entered an era of low inflation, and the role of gold as a symbol of monetary stability has become increasingly smaller. And as a long-term investment tool, gold's yield is increasingly lower than securities such as bonds and stocks. However, in the long run, gold is still an important means of dealing with inflation. (4) The impact of international trade, finance, and foreign debt deficits on gold prices. Debt is a global problem that is no longer unique to developing countries. In the debt chain, if the debtor country itself is unable to repay its debt, it will lead to economic stagnation, and economic stagnation will further worsen the vicious cycle of debt. Even creditor countries will face the risk of financial collapse due to the breakdown of relations with debtor countries. At this time, all countries will reserve large amounts of gold in order to protect their own economies from harm, causing the market price of gold to rise. (5) International political turmoil, war, terrorist incidents, etc. Major international political and war events will affect gold prices. The government pays for wars or to maintain the stability of the domestic economy, and a large number of investors turn to gold for value-preserving investment. These will expand the demand for gold and stimulate the rise of gold prices. For example, World War II, the US-Vietnam War, the 1976 Thai coup, the 1986 "Iran-Contra" incident, etc., all caused the gold price to rise to varying degrees. For example, the terrorist organization's attack on the World Trade Center in the United States on September 11, 2001 caused the price of gold to soar to a high of nearly $300/ounce that year. (6) The impact of stock market conditions on gold prices. Generally speaking, when the stock market falls, the price of gold rises. This mainly reflects investors' expectations for economic development prospects. If everyone is generally optimistic about the economic prospects, a large amount of funds will flow to the stock market, investment in the stock market will be enthusiastic, and the price of gold will fall. vice versa. In addition to the above-mentioned factors affecting gold prices, the intervention activities of international financial organizations and the policies and regulations of national and regional central financial institutions will also have a significant impact on changes in world gold prices. (7) Oil price Gold itself, as a store of value under inflation, is inseparable from inflation. Higher oil prices mean inflation will follow, and so will gold prices.

Gold is the metal discovered and utilized earlier by humans. Because it is rare, special and precious, it has been regarded as the first of hardware since ancient times. It has the title of "King of Metals" and enjoys a reputation unmatched by other metals. Its prominent status is almost eternal. Precisely because gold has this 'noble' status, it has been a symbol of wealth and luxury for a period of time, and it has been used as financial reserves, currency, jewelry, etc. So far, gold still occupies a dominant position in the applications in the above fields.

Requirements and uses

1). Used as international reserves. This is determined by the monetary commodity properties of gold. Due to the excellent properties of gold, gold has historically served as a currency, such as a measure of value, a means of circulation, a means of storage, a means of payment and a world currency. Since the decoupling of gold from the U.S. dollar in the 1970s, gold's monetary function has also weakened, but it still maintains a certain monetary function. At present, gold still occupies a very important position in the international reserves of many countries, including major Western countries. 2). Used as jewelry decoration. Gorgeous gold jewelry has always been a symbol of a person's social status and wealth. 3). Application in industry and science and technology. Due to the unique and perfect properties of gold, it has extremely high corrosion resistance and stability; good electrical and thermal conductivity; the gold nucleus has a large effective cross-section for capturing neutrons; and its reflection ability of infrared rays is close to 100%. ; It has various catalytic properties in gold alloys; gold also has good craftsmanship and is easily processed into ultra-thin gold foil, micron gold wire and gold powder; gold is easily plated on the surfaces of other metals, pottery and glass. Gold can be easily welded and forged under certain pressure; gold can be made into superconductors and organic gold.

Because of its many beneficial properties, it has reason to be widely used in the most important modern high-tech industries, such as electronic technology, communication technology, aerospace technology, chemical technology, medical technology, etc.