(1) International gold and crude oil prices are all priced in US dollars, and the fluctuation of the US dollar exchange rate will directly lead to the same fluctuation of gold prices and oil prices.
(2) High oil prices will aggravate inflation and lead to an increase in the price of gold.
(3) The fluctuation of crude oil price directly affects the operation of gold in oil-producing countries, which leads to the fluctuation of gold price. Major oil-producing countries, such as Saudi Arabia, Qatar, United Arab Emirates, Kuwait and Iran, are mostly concentrated in the Gulf region, mostly Arab countries, with huge crude oil dollars in their hands. When the international gold price fluctuates, their operations on petrodollars tend to be in the same direction.
In order to transfer risks, crude oil exporting countries often invest a huge part of petrodollars in international financial markets, and gold, as an excellent tool to avoid risks and preserve investment, is naturally within the choice of these crude oil exporting countries.
During the period of rising crude oil prices, the crude oil dollars held by oil-producing countries will expand rapidly, so these countries will correspondingly increase the proportion of gold in their international reserves and increase the demand for gold in the international gold market, thus pushing up the price of gold.
It is these crude oil dollars from the Middle East that promote the growth of gold investment demand, thus promoting the rise of gold prices.