Gold is not only a commodity, but also has monetary properties, which actually endows gold with the function of preserving value. That is to say, in the case of war, turmoil, catastrophe and inflation, people will buy a lot of gold for the purpose of preserving value and avoiding risks, because people often lose trust in the paper money issued by the government, which leads to an imbalance between supply and demand in the market and a sharp rise in the price of gold.
In recent decades, although there has been no world war, regional conflicts and local wars have continued one after another, which has caused people to maintain a high degree of vigilance against the world political situation. At the same time, after the Asian financial turmoil, the shadow of economic collapse and paper currency depreciation has never been erased from investors' minds. When the Federal Reserve continues to raise interest rates to 5% this year, investors are worried about the economy again.
(B) changes in the international financial market
In the last two or three decades, great changes have taken place in the international financial market, and the fluctuation of exchange rates in various countries has greatly increased, which has caused some long-term investors to invest a certain proportion of their funds in gold. At the same time, due to the recovery of the global IT industry after the Asian financial turmoil, the demand for metals by high-tech enterprises has increased, resulting in a situation of short supply. With the economic recovery, hot money reappeared in the market and flowed into the stock market and futures market one after another, which promoted the current round of market since 1999.
(3) Other factors affecting gold.
Price effect: the price of other commodities is the price of other precious metals first, and then the price of oil plays a vital role in the price of gold. The high oil price last year and this year has become the main external cause of this round of gold market.
Global luxury trend: Since last year, the words "high-end" and "high-end" have been talked about more in the market. In order to obtain the excess profits of some so-called ultra-high-end customers, all businesses have plated gold and silver on their products to promote luxury, so as to gain a sense of dignity and high-end. As a result, the global consumption of gold has increased, and with the sustained economic growth in Asia, the demand for jewelry in this region has also increased year by year, thus pushing up the price of gold to some extent.