I don’t know if you have noticed that every time the economic environment has ups and downs or a turning point, people’s attention to gold will instantly increase. In people's widespread perception, gold as money is a symbol of appreciation. Therefore, moderate hoarding of gold is essentially to prevent the money in hand from losing value. What harm does China's economic development have to the price of gold?

Gold is an important form of international reserve, and China is the world's largest product exporter and the second largest commodity exporter. Therefore, if China's economic development causes instability, It has a huge impact on world economic development. In essence, if China's economic development seriously declines, the world economic situation suffers corresponding impacts, and inflation expectations increase, gold's "emergency hedging function" will appear, and people will rush to buy gold during a limited time, and the price of gold will rise. . On the contrary, if China's economic development improves normally, the global economy will of course be given a "booster" and everyone will be willing to invest in industry. If no one rushes to buy gold for a limited time, the price of gold will fall. Gold price fluctuations cannot escape these factors!

We start from the best-understood and most superficial relationship between supply and demand. No matter what item it is, whether it is currency or supplies, including gold, as long as the demand increases, even if the supply does not change, its price will also increase in an environment where everyone competes for it. When it comes to the factors that affect purchase intention, it is more complicated. The supply and demand of gold not only depends on personal wishes, but also has a lot to do with the economic situation. To put it simply, the ups and downs of the global economic situation will affect people's attention to gold, and their requirements will also change accordingly.

For example, if a person has money in hand and chooses to invest in currency, if the currency situation is good, he will focus more on investing in currency. If the currency situation is depressed and continues to fall, it will be easier for him to focus on relatively stable projects when it comes to investment projects. Compared with investment and financial management such as currencies, stock funds, and futures trading, the stability of gold has always been very high. When people pay less attention to investment in other projects, they will put a lot of attention on relatively stable gold. At this time, as the demand for gold increases, the price of gold will rise to a certain extent.

The price of gold has fallen for four consecutive months, which must also be considered in the overall environment of this year. There are many factors that affect the world economic situation, such as war, COVID-19, transportation obstructions, policy changes, etc., which may affect the development of the world economy. Among them, the Federal Reserve's interest rate hike has become the most direct factor. After the outbreak of COVID-19, the main productive forces of countries around the world are not high, social and economic development has stalled, and the shortage of materials has caused rising price levels. In order to cope with the crisis, European and American countries chose to print a lot of money to solve the problem, causing countries around the world to be affected by inflation.

Coupled with the current unstable international situation, the supply of electricity, energy, food crops and other materials continues to increase, further exacerbating the problem of inflation. In response to the transformation of the world economy, the United States has taken desperate measures to raise interest rates, hoping to rely on the "hegemony" of the U.S. dollar to release pressure.

The U.S. dollar exchange rate is closely related to the fluctuation of gold prices, and the gold price can be maintained for a long time if the rates are stable. The Fed's interest rate hikes cause the U.S. dollar to strengthen, which means that less and less U.S. dollars are needed to buy the same amount of gold, so the price of gold will fall.

So what do you think about this matter? Welcome to express your opinions and ideas!