In times of war and political turmoil, economic development will be greatly restricted. Due to inflation, any local currency may depreciate. At this time, the importance of gold is fully demonstrated. Because gold has recognized characteristics and is an internationally recognized trading medium, people will invest in gold at this moment. Buying gold will inevitably lead to an increase in the price of gold.
But there are other factors * * * the same constraints. For example, from 1989 to 1992, there were many political turmoil and sporadic wars in the world, but the price of gold did not rise. The reason is that everyone held dollars at that time and gave up gold. Therefore, investors should not mechanically use war factors to predict the price of gold, but also consider other factors such as the US dollar.
Major international political and war events will affect the price of gold. The government pays for the war or in order to maintain domestic economic stability, a large number of investors turn to gold to invest, which will expand the demand for gold and stimulate the price of gold to rise. For example, World War II, the Vietnam War, 1976 coup in Thailand, and 1986 Iran-contra incident all caused the price of gold to rise to varying degrees. For example, the terrorist attack on the World Trade Center in the United States caused the price of gold to soar.