Gold, the US dollar and oil have always been the focus of people's attention during the development of the world economy, and there is an inherent connection between the three. At the same time, these three are also the "barometer" of the world economy. The most important part. Most investors have a certain understanding of the relationship between the three, but many people simply know some of the symptoms and do not clearly understand the reasons. The author here attempts to deeply analyze the origin of the relationship between gold, the US dollar, and crude oil, in order to help investors analyze, judge and grasp the global macro situation.

1. Negative correlation between gold and the U.S. dollar

For a long time, because the price of gold is priced in U.S. dollars and is directly affected by the U.S. dollar, gold and the U.S. dollar have shown a large negative correlation. Relevance.

First of all, the appreciation or depreciation of the US dollar will directly affect changes in the international gold supply and demand relationship, thereby leading to changes in gold prices. From the perspective of gold demand, since gold is priced in US dollars, when the US dollar depreciates and other currencies are used to purchase gold, the same amount of funds can buy more gold, thereby stimulating demand, leading to an increase in the demand for gold, and then promoting Gold prices are higher. On the contrary, if the U.S. dollar appreciates, gold becomes more expensive for investors using other currencies, which inhibits consumption and causes gold prices to fall.

Secondly, the appreciation or depreciation of the US dollar represents people's confidence in the US dollar. The appreciation of the U.S. dollar indicates that people have increased confidence in the U.S. dollar, thereby increasing their holdings of the U.S. dollar and, relatively speaking, reducing their holdings of gold, causing the price of gold to fall; conversely, the depreciation of the U.S. dollar causes the price of the U.S. dollar to rise. For example: Since the 1980s and 1990s, the U.S. economy has developed rapidly, and a large amount of overseas funds have flowed into the United States. During this period, because the return on investment in other markets was far greater than that of investing in gold, investors withdrew from the gold market on a large scale, causing the gold price to experience 20 consecutive years of decline. After entering 2001, the global economy fell into recession, and the exchange rate of the US dollar against the currencies of other major countries fell rapidly. In order to avoid inflation and currency depreciation, investors began to return to the gold market, which brought a critical turning point in the trend of gold. Since 2002, although the U.S. economy has gradually emerged from the recession, economic recovery still faces many challenges due to negative impacts such as the Iraq War. In 2003, overseas investors began to pay close attention to the twin deficits in the United States. Although the Federal Reserve tried to use currency devaluation to reduce the trade deficit, this method did not seem to work. The US dollar became less and less attractive to overseas investors, and a large number of Funds flowed out to Europe and other markets. The subprime mortgage crisis that broke out in 2007 pushed the U.S. financial crisis to a climax. The U.S. dollar depreciated at an accelerated pace, and the scale of gold investment reached a record high.

It is worth noting that the negative correlation between the US dollar and gold we are talking about is based on the long-term trend. From the short-term perspective, exceptions are not excluded. For example, in 2005, the US dollar and gold rose simultaneously. The main reason for this situation was the political and economic turmoil in Europe: the integration process faced the crisis of collapse due to the failure of the French referendum. The economy has been stagnant, and the British economic development has stagnated and regressed. The European Central Bank, which was supposed to cut interest rates to stimulate the economy, is in a dilemma due to the widening interest rate gap between the US dollar and the euro. It can only barely maintain the current interest level. In order to stimulate As the economy lowered interest rates, the euro and the pound were sold off by the market. In the short term, investors could only return to the U.S. dollar and gold markets to seek safe havens, pushing the U.S. dollar and gold to rise simultaneously.

2. Positive correlation between gold and oil

There is a positive correlation between gold and oil, which means that the price of gold and the price of oil usually change in a positive direction. An increase in the price of oil indicates that the price of gold will also increase, and a decrease in the price of oil indicates that the price of gold will also fall.

First of all, oil price fluctuations will directly affect the development of the world economy, especially the U.S. economy, because the U.S. economic aggregate and crude oil consumption both rank first in the world, and U.S. economic trends directly affect changes in U.S. asset quality, causing The U.S. dollar rises and falls, causing gold prices to rise and fall. According to estimates by the International Monetary Fund, every US$5 increase in oil prices will reduce global economic growth by about 0.3 percentage points, and U.S. economic growth may fall by about 0.4 percentage points. When oil prices continued to surge, the International Monetary Fund also lowered its forecast for future economic growth. Oil prices have become a "barometer" of the global economy. High oil prices also mean increased uncertainty about economic growth and rising inflation expectations, which in turn pushes up the price of gold.

In the relationship between gold, oil, and the US dollar, the price of gold is mainly priced in US dollars, and the same is true for oil. In the early 1970s, after the collapse of the Bretton Woods system, the world monetary system established after World War II, the price of gold and oil both broke away from their fixed exchange ratios with the U.S. dollar, and prices surged sharply. There are close connections and checks and balances between the three. There is relative stability hidden in each other's fluctuations, and there is absolute change in the apparent stability. In the medium to long term, the fluctuation trends of gold and crude oil are basically the same, but there are differences in magnitude.

Over the past three decades, the price fluctuations of gold and oil in US dollars have been relatively stable. The average price of gold is about US$300 per ounce and the average price of oil is about US$20 per barrel. The average exchange relationship between gold and oil is that 1 ounce of gold is exchanged for about 16 barrels of oil. This ratio reached its peak in the mid-to-late 1980s, when 1 ounce of gold was exchanged for approximately 30 barrels of crude oil. However, subsequently, the price of crude oil rose sharply due to tight supply, while gold experienced relative stagflation during the same period. As of now, 1 ounce of gold can only be exchanged for about 12 barrels of oil. Judging from the current exchange ratio between oil and gold, there is still room for gold prices to rise.

3. The negative correlation between the U.S. dollar and oil

The U.S. economy has long relied on the two pillars of oil and the U.S. dollar. It relies on the U.S. dollar’s ??minting power and the U.S. dollar’s ??monopoly in the international settlement market. , has mastered the pricing power of the US dollar; and through its super military power, nearly 70% of the world's oil resources and major oil transportation channels have been placed under its direct influence and control, thus controlling the global oil supply and controlling the price of oil. price. Over the long term, when the dollar weakens, oil prices rise; when the dollar strengthens, oil prices tend to fall.

4. Look at the gold price trend from the relationship between the three.

From the above analysis, we can see that there is an inherent connection between gold, oil and the US dollar. From the current situation Judging from the situation: It is too early to say that gold will turn from a bull market to a bear market. This is because:

First of all, due to the scarcity of resources, gold is a non-renewable resource, and the increase in supply is declining, while demand But it continues to rise, and prices must continue to rise.

Secondly, due to the relationship between oil and gold prices moving in the same direction, the world economy’s consumption of oil is increasing day by day, and the rise in oil prices drives the price of gold to move in the same direction; in addition, historically, the relationship between gold and oil In terms of exchange relationship, the current exchange rate of barrels of oil per ounce of gold is relatively low, and the price of gold should have room to rise.

Finally, although the U.S. dollar has rebounded recently, and some investment banks even believe that the U.S. dollar may reverse the weak pattern that has lasted for many years, the rebound of the U.S. dollar is based on the spread of the subprime mortgage crisis to Europe. Regardless of the U.S. economy, Neither the real estate market nor the financial market, which is the source of the subprime mortgage crisis, has shown a significant turn for the better. Stagflation and twin deficits are a sharp sword facing the dollar's rebound. The current market environment is similar to that in 2005. The Eurozone economy is in trouble. Although the fundamentals of the US dollar are poor, it is not ruled out that investors will return to the US dollar and gold markets to seek safe havens when selling the euro, pushing the US dollar and gold to rise simultaneously.