The sharp drop in gold will first lead some one-way investors to withdraw from the trading market. Long-term investment in gold began to withdraw from the market, and short-term speculative funds will enter. But when there is a long-term decline in gold, the overall investment funds will be squeezed out of this market. At this time, this part of the investment funds will need a carrier, and the demand for industrial investment will increase accordingly. This is a good thing for the economy.

The sharp drop in the price of gold will also have an impact on the lives of ordinary people. Gold is denominated in dollars worldwide and in RMB at home. Generally speaking, gold is priced with paper money. When the price of gold falls sharply, it means that the same amount of paper money has higher purchasing power.