News that you need to pay attention to when buying and selling gold:

1. Supply factors:

The main supply factors include:

1. On the ground Gold Stock

There are currently about 137,400 tons of gold in the world, and the stock of gold on the ground is still growing at a rate of about 2% every year.

2. Annual supply and demand

The annual supply and demand of gold is approximately 4,200 tons, and the newly produced gold every year accounts for 62% of the annual supply.

3. New gold mining costs

The average total cost of gold mining is approximately just under $260 per ounce. Gold development costs have continued to fall over the past 20 years due to advances in mining technology.

4. Political, military and economic changes in gold-producing countries

Any political or military turmoil in these countries will undoubtedly directly affect the amount of gold produced in that country, and thus affect the World gold supply.

5. Central Bank’s Gold Selling

The Central Bank is the largest holder of gold in the world. In 1969, the official gold reserve was 36,458 tons, accounting for 42.6% of the total surface gold stock at that time. , and by 1998 the official gold reserves were approximately 34,000 tons, accounting for 24.1% of all mined gold stocks. Based on current production capacity, this is equivalent to 13 years of world gold mine production. As the main use of gold has gradually changed from an important reserve asset to a metal raw material for the production of jewelry, either to improve the country's international balance of payments, or to suppress the international gold price, the central bank's gold reserves in the past 30 years have been both absolute and relative. There has been a significant decline, and the decline in quantity is mainly due to the selling of gold inventory reserves in the gold market. For example, the massive sell-off by the Bank of England and the preparations of the Swiss National Bank and the International Monetary Fund to reduce gold reserves have become the main reasons for the recent decline in gold prices in the international gold market.

2. Demand factors:

The demand for gold is directly related to the use of gold.

1. Changes in the actual demand for gold (jewellery industry, industry, etc.).

Generally speaking, the development speed of the world economy determines the total demand for gold. For example, in the field of microelectronics, gold is increasingly used as a protective layer; in fields such as medicine and architectural decoration, although technology The advancement of technology has led to the continuous emergence of gold substitutes, but the demand for gold is still on the rise due to its special metallic properties.

In some regions, local factors have a significant impact on gold demand. For example, India and Southeast Asian countries, which have always had a large demand for gold jewelry, have seen a significant reduction in gold imports since 1997 due to the impact of the financial crisis. According to data from the World Gold Council, gold demand in Thailand, Indonesia, Malaysia and South Korea has dropped by 71% respectively. %, 28%, 10% and 9%.

2. The need to preserve value.

Gold reserves have always been used by the central bank as an important means to prevent domestic inflation and regulate the market. For ordinary investors, investing in gold is mainly to achieve the purpose of preserving value under inflation. In an economic downturn, as gold provides insurance relative to monetary assets, the demand for gold rises and the price of gold rises. For example: In the three U.S. dollar crises after World War II, due to the serious U.S. balance of payments deficit trend, the U.S. dollars held by various countries increased significantly. The market's confidence in the value of the U.S. dollar was shaken. Investors rushed to buy gold in large quantities, which directly led to the bankruptcy of the Bretton Woods system. . In 1987, due to the depreciation of the US dollar, the increase in the US deficit, and the unstable situation in the Middle East, the international gold price rose sharply.

3. Speculative demand:

Speculators take advantage of the fluctuations in gold prices in the gold market based on the international and domestic situation, coupled with the trading system of the gold futures market, to "short sell" or "short" in large quantities. "Supplementing" gold artificially creates the illusion of gold demand. In the gold market, almost every major decline is related to hedge fund companies borrowing short-term gold to sell in the spot gold market and building large short positions on the COMEX gold futures exchange. When gold prices fell to a 20-year low in July 1999, data released by the U.S. Commodity Futures Trading Commission (CFTC) showed that speculative short positions on the COMEX were close to 9 million ounces (nearly 300 tons). When a large number of stop-loss selling orders were triggered, the price of gold fell, and fund companies took the opportunity to cover profits. When the price of gold rebounded slightly, the hedging forward selling orders from manufacturers suppressed the further rise in gold prices, and at the same time provided funds to fund companies. New opportunities were used to re-establish short selling positions, forming a downward trend in gold prices at that time.

1. The impact of political factors on gold price fluctuations

Since the gold market is mainly composed of liquid assets, the daily international market trading volume is nearly one trillion U.S. dollars, which is closely related to the stock market and bond market. Compared with its reflection on political and other factors, it is much greater.

Generally speaking, the results of political events are difficult to accurately predict. Most of them are accidental and sudden. Therefore, the market is more sensitive to such events. This is reflected in the short-term fluctuations in gold prices that often exaggerate their impact on the economy. Real impact.

In terms of specific forms, political events generally include wars, border conflicts, general elections, political scandals, changes in government heads, political instability, and resulting financial crises.

Major international political and war events will affect the price of gold. The government pays for wars or to maintain the stability of the domestic economy, and a large number of investors turn to gold for value-preserving investment. These will expand the demand for gold and stimulate the rise of gold prices. For example, World War II, the U.S.-Vietnam War, the 1976 Thai coup, and the 1986 "Iran-Contra" incident all caused gold prices to rise to varying degrees. For example, the terrorist organization's attack on the World Trade Center in the United States in September 2001 caused the price of gold to soar to the highest level of nearly $300 for the whole year.

Due to the different locations and causes of political risks and the regions affected, this is reflected in The fluctuation range of gold prices is not nearly the same. Investors in the gold market should analyze the important factors that affect gold price fluctuations in detail, and judge the impact of the results on gold prices from a comprehensive, fair and objective perspective. Making generalizations and making assumptions based on personal preferences is likely to incur a heavy price.

2. The impact of economic factors on the price of gold

In addition to the political factors that have a significant impact on the price of gold described above, investors in the gold market have to face more challenges every day. Countries constantly release economic data to the outside world. The impact of these data on gold price fluctuations may be large or small, and the effect time may be long or short. Many of us, especially gold investors who have just entered the market, often feel unable to start and find it difficult to analyze and judge when faced with the messy and complex data in front of us. In the actual foreign exchange trading process, due to the real-price trading method we currently use, the transaction costs (bid-ask spread) are relatively large, which limits the opportunities for frequent market entry and buying and selling operations. Therefore, those data that are likely to have a greater impact on the gold price are The key point we need to focus on is to eliminate the dross and select the essence to achieve good results with twice the result with half the effort.

IV. Other factors:

1. The monetary policies of various countries are closely related to the international gold price.

When a country adopts a loose monetary policy, due to the decline in interest rates, the country's money supply increases, increasing the possibility of inflation, which will cause the price of gold to rise. For example, the low interest rate policy of the United States in the 1960s prompted the outflow of domestic capital, and a large amount of U.S. dollars flowed into Europe and Japan. As their net positions in U.S. dollars increased, countries became worried about the value of the U.S. dollar, so they began to sell U.S. dollars in the international market, snap up gold, and Eventually led to the disintegration of the Bretton Woods system. However, after 1979, the impact of interest rate factors on gold prices became increasingly weakened.

For example, the Federal Reserve’s eleven interest rate cuts this year did not have a very big impact on the gold market. Only the gold market benefited from the "9.11" incident.

2. The impact of inflation on gold prices.

This requires long-term and short-term analysis, and it must be combined with the degree of inflation in the short term. In the long run, if the annual inflation rate changes within the normal range, it will have little impact on the fluctuation of gold prices; only in the short term, if prices rise sharply, causing people to panic, and the unit purchasing power of currency decreases, the price of gold will increase significantly. rise. Although after entering the 1990s, the world entered an era of low inflation, and the role of gold as a symbol of monetary stability has become increasingly smaller. And as a long-term investment tool, gold's yield is increasingly lower than securities such as bonds and stocks. However, in the long run, gold is still an important means of dealing with inflation.

3. The impact of international trade, finance, and foreign debt deficits on gold prices.

Debt, a global problem, is no longer unique to developing countries. In the debt chain, not only are the debtor countries themselves unable to repay their debts, leading to economic stagnation, and economic stagnation further worsens the vicious cycle of debt, even creditor countries will face the risk of financial collapse due to the breakdown of relations with debtor countries. At this time, all countries will reserve large amounts of gold in order to protect their own economies from harm, causing the market price of gold to rise.

4. The impact of stock market conditions on gold prices.

Generally speaking, when the stock market falls, the price of gold rises. This mainly reflects investors' expectations for economic development prospects. If everyone is generally optimistic about the economic prospects, a large amount of funds will flow to the stock market, investment in the stock market will be enthusiastic, and the price of gold will fall.

In addition to the above-mentioned factors affecting gold prices, the intervention activities of international financial organizations and the policies and regulations of national and regional central financial institutions will also have a significant impact on changes in world gold prices.

In summary: There are many factors that affect gold fluctuations, and gold price changes are complex. Even the most successful financiers are difficult to make 100% accurate predictions on the unpredictable market. Individual gold investors are In the ever-changing fluctuations of the gold market, if you are not careful, you will miss the opportunity to enter the market or incur certain losses, which will have a negative impact on your mentality of continuing to invest in the future