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Why did the price of gold plummet?
Generally speaking, gold has two attributes: commodity and finance. The price of gold is formed by the comprehensive influence and joint action of many factors. Various forces influence and interact with each other, and the fluctuation and change of gold price are formed by influencing the relationship between supply and demand. The skyrocketing and plunging price of gold is mainly affected by the following factors:

1. USD trend: Usually, people will give up USD when they take gold, and they will also give up gold when they take USD. 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. Period of war and political shock: During the period of war and political shock, 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.

3. World financial crisis: When a crisis occurs, people will naturally hold their money in their own hands, and banks will run or close down in large numbers. 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: The purchasing power of a country's currency is determined according to 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.

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 the price of gold.

6. Local interest rate: Investing in gold 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. Supply and demand of gold: The price of gold is based on 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.