The factors that affect the price of gold, most of the reasons for the change of gold price are influenced by the supply and demand relationship of gold itself. Therefore, as an investor with his own investment principles, he should know as much as possible about any factors that affect the supply of gold, so as to further understand the dynamics of other investors in the market and predict the trend of gold prices in order to achieve the purpose of reasonable investment. The main factors include the following aspects: (1) The trend of the US dollar Although the US dollar is not as stable as gold, its liquidity is much stronger than gold. So the dollar is considered as the first currency, and gold is the second. When the international political situation is tense and uncertain, people will buy gold because they expect the price of gold to rise. But the currency held by most people is actually dollars. If the country needs to buy weapons or other materials from other countries during the war, it will also sell its gold for dollars. Therefore, the dollar will not necessarily rise during the period of political instability, but also depends on the trend of the dollar. Simply put, the dollar is strong and gold is weak; Gold is strong and the dollar is weak. Usually, investors will give up dollars when they take gold, and they will also give up gold when they take dollars. Although gold itself is not legal tender, it still has its value and will not depreciate into scrap iron. If the dollar is strong and there is a great chance of appreciation, people will naturally chase it. On the contrary, when the dollar weakens in the foreign exchange market, the price of gold will strengthen. (2) 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. However, there are other common 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. (3) World Financial Crisis If a world-class bank goes bankrupt, how will the price of gold react? In fact, this situation is due to the emergence of the crisis. People will naturally hold their money in their own hands, and banks will have a large number of runs or failures. This situation is just like the recent economic crisis in Argentina. People all over the country want to exchange US dollars from banks, but the country prohibits the exchange of US dollars in order to reserve the last investment opportunity, which leads to continuous riots and panic throughout the country. When the financial system of the United States and other western powers is unstable, world funds will be invested in gold, and the demand for gold will increase, and the price of gold will rise. At this time, gold played the role of a financial refuge. Only when the financial system is stable, investors' confidence in gold will be greatly reduced, and selling gold will lead to a decline in the price of gold. (4) Inflation As we know, the purchasing power of a country's currency is determined by the price index. When the price of a country is stable, the purchasing power of its currency is more stable. On the contrary, the higher the currency exchange rate, the weaker the purchasing power of the currency and the less attractive it is. If the price index in the United States and major regions of the world remains stable, holding cash does not depreciate, and there is interest income, it will inevitably become the first choice for investors. On the contrary, if inflation rises sharply, there is no guarantee to hold cash at all, and interest can't keep up with the sharp rise in prices. People will buy gold because the theoretical price of gold will rise with inflation. The higher the inflation in major western countries, the greater the demand for gold as a safe haven, and the higher the world gold price will be. Among them, the inflation rate in the United States is the most likely to affect the change of gold. In some smaller countries, such as Chile and Uruguay, the annual inflation rate can be as high as 400 times, but it has no effect on the price of gold. (5) Oil price gold itself is a hedge against inflation, which is inseparable from inflation in the United States. Rising oil prices mean that inflation will follow, and so will gold prices. (6) Investing in gold at the local interest rate will not earn interest, and the profit of its investment depends entirely on the price increase. When the interest rate is low, there will be some income from investing in gold; However, if the interest rate rises, it will be more attractive to collect interest, and the investment value of interest-free gold will decline. Since the opportunity cost of gold investment is high, it is more stable and reliable to put it in the bank to collect interest. Especially when the interest rate in the United States rises, the dollar will be absorbed in large quantities and the price of gold will be frustrated. Interest rates are closely related to gold. If the domestic interest rate is high, it is necessary to consider whether it is worthwhile to lose interest income to buy gold. (7) Economic conditions: The booming economy and carefree life will naturally enhance people's desire for investment. People's ability to buy gold for preservation or decoration will be greatly increased, and the price of gold will be supported to a certain extent. On the contrary, people live in poverty. During the economic depression, people can't even meet the basic guarantee of food and clothing. Where are they interested in investing in gold? The price of gold is bound to fall. The economic situation is also a factor that constitutes the fluctuation of gold prices. (8) Supply and demand of gold The price of gold is based on the relationship between supply and demand. If the output of gold increases significantly, the price of gold will be affected and fall back. However, if the output stops increasing due to the long-term strike of miners, the price of gold will appreciate in the case of short supply. In addition, the application of new gold mining technology and the discovery of new mines have increased the supply of gold, which will of course cause the price of gold to fall. A place may also have the habit of investing in gold, such as Japan's gold investment boom, which needs to be greatly increased, which also leads to price increases. There are many aspects in the basic analysis of gold trend. When we use these factors, we should consider how strong their respective functions are. Find out the primary and secondary positions and influencing time periods of each factor, and make the best investment decision. The basic analysis of gold can be divided into short-term (usually three months) factors and long-term factors. We should treat its influence separately.