From a long-term and macro perspective, the fluctuation of gold price reflects the change of market supply and demand. However, from a short-term and microscopic point of view, the fluctuation of gold price often deviates from the long-term equilibrium price of gold. Most gold investors, once they enter the gold market, are unlikely to stick to the long-term concept of the gold market trend and wait and see the market changes like a rock in the face of daily gold price fluctuations. More importantly, they need to profit from repeated ups and downs. Therefore, investors in the gold market are required to focus on the short-term factors that cause fluctuations in the gold market on the premise of taking the long-term trend of the gold market as a reference. Usually, the short-term factors that affect the fluctuation of the gold market can be divided into three aspects: politics, economy and psychology. This chapter will mainly discuss these short-term factors that affect the fluctuation of gold price from a pragmatic perspective. The main supply factors of 1 are as follows: (1) At present, there are about137,400 tons of gold in the world, and the above-ground gold stock is still growing at a rate of about 2% every year. (2) Annual supply and demand The annual supply and demand of gold is about 4,200 tons, and the newly produced gold accounts for 62% of the annual supply. (3) New gold mining costs The average total cost of gold mining is slightly lower than $260 per ounce. Due to the development of mining technology, the cost of gold development has been declining in the past 20 years. (4) Political, military and economic changes in gold-producing countries. Any political and military turmoil in these countries will undoubtedly directly affect the country's gold production, and then affect the world's gold supply. Demand factor: the demand for gold is directly related to the use of gold. (1) Changes in the actual demand for gold (jewelry 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 the fields of medicine, building decoration and so on, although the progress of science and technology makes gold substitutes appear constantly, the demand for gold is still on the rise because of its special metal properties. In some areas, local factors have a great influence on the demand for gold. For example, due to the financial crisis, India and Southeast Asian countries, which have always had a great demand for gold jewelry, have greatly reduced their gold imports since 1997. According to the data of the World Gold Council, the demand for gold in Thailand, Indonesia, Malaysia and South Korea decreased by 7 1%, 28%, 10% and 9% respectively. (2) the need to preserve value. Gold reserves have always been regarded by the central bank as an important means to prevent domestic inflation and regulate the market. For ordinary investors, investing in gold is mainly for the purpose of preserving value under inflation. During the economic downturn, due to the insurance of gold relative to monetary assets, the demand for gold increased and the price of gold rose. For example, in the three dollar crises after World War II, due to the serious balance of payments deficit in the United States, the dollar held by various countries increased greatly, the market's confidence in the value of the dollar was shaken, and investors snapped up gold in large quantities, which directly led to the bankruptcy of the Bretton Woods system. The depreciation of 1987 dollars, the increase of the deficit in the United States and the instability in the Middle East also contributed to the sharp rise in international gold prices. Speculative demand According to the international and domestic situation, speculators use the fluctuation of gold price in the gold market and the trading system in the gold futures market to "short" or "replenish" gold in large quantities, artificially creating the illusion of gold demand. In the gold market, almost every plunge is related to hedge fund companies borrowing short-term gold to sell in the spot gold market and establishing a large number of short positions on the COMEX gold futures exchange. When the price of gold fell to a 20-year low of 1999 in July, the data released by the Commodity Futures Trading Commission (CFTC) showed that COMEX's speculative short position was close to 9 million ounces (nearly 300 tons). When a large number of stop-loss selling was triggered, the price of gold fell, and the fund company took the opportunity to make up the position and make a profit. When the gold price rebounded slightly, the hedging forward selling from manufacturers suppressed the further rise of the gold price, and at the same time gave the fund company a new opportunity to re-establish short positions, forming a downward pattern of the gold price at that time. 3. 1 The influence of political factors on the fluctuation of gold price Because the gold market is mainly composed of liquid assets, the daily turnover of the international market is nearly one trillion US dollars, which can better reflect political factors than the stock market and the bond market. Generally speaking, the results of political events are difficult to predict accurately, and most of them are accidental and sudden, so the market is sensitive to such events, which is reflected in the short-term fluctuation of gold prices and often exaggerates its real impact on the economy. From the specific form, political events generally include wars, border conflicts, general elections, political scandals, the change of heads of government, political instability and the resulting financial crisis. Major international political and war events will affect the price of gold. The government pays for the war or in order to maintain domestic economic stability, a large number of investors turn to gold to invest, which will expand the demand for gold and stimulate the price of gold to rise. For example, World War II, the Vietnam War, 1976 coup in Thailand, and 1986 Iran-contra incident all caused the price of gold to rise to varying degrees. For example, the terrorist attack on the World Trade Center in September, 200012000 caused the price of gold to soar to nearly $300. Due to the different locations, reasons and influence areas of political risks, the fluctuation range of gold prices is also different. Investors in the gold market should analyze these important factors from a comprehensive, fair and objective perspective and judge the impact of the results on the gold price, which is biased. 3.2 The influence of economic factors on the price of gold Apart from the political factors that have a great influence on the price of gold mentioned above, as investors in the gold market, they have to face the economic data constantly released by various countries every day. These data have a big or small impact on the fluctuation of gold prices, and the action time is long or short. Many of us, especially gold investors who have just entered the market, often feel at a loss when faced with chaotic and complicated data, and it is difficult to analyze and judge. In the actual process of foreign exchange trading, because the transaction cost (bid-ask spread) of the firm trading method we are currently using is large, and the opportunities for day trading in the market are limited, so those data that may have a greater impact on the gold price are the key points we should pay attention to. Only by removing the rough and selecting the fine can we achieve a good result with half the effort. Other factors: the current gold market price is the result of the balance of gold spot supply and demand, the exchange rate of the US dollar, the international political situation, global inflationary pressure, global oil price, global economic growth, the increase and decrease of gold reserves of central banks and the trading of gold traders. It is difficult for individual investors to accurately grasp the short-term trend of gold prices. However, according to the experience of international gold market, individual investors can make a relatively simple judgment and grasp of the trend of gold price by referring to gold and the dollar, the interaction between gold and oil, gold and stock market, the linkage relationship between commodity markets, the seasonal supply and demand factors of gold market, the positions of international funds and other factors. (I) Interaction between the gold price and the US dollar Since the international gold price is denominated in US dollars, the interaction between the gold price and the US dollar is very close. Under normal circumstances, the dollar rises and gold falls; The reverse interaction between the falling dollar and the rising gold. In the case of normal fundamentals, capital and supply and demand, the reverse interaction of gold and the dollar is still an important basis for investors to judge the trend of gold prices. For example, in May 2005, the international gold price dropped from 730 USD/oz to 54/kloc-0 USD/oz, which was one of the main reasons for the sharp drop in gold price. At that time, the market expected the Federal Reserve to raise interest rates again, and the dollar would rebound strongly, leading to a deep adjustment of gold prices. (II) Interaction between gold price and oil price Crude oil price has always been closely related to the gold market, because gold has anti-inflation function and international crude oil price is closely related to inflation level, so there is a positive interaction between gold price and international crude oil price. For example, in the fourth quarter of 2005, affected by Hurricane Katrina, the international crude oil price rose sharply, pushing the international gold price to rise sharply. (III) Linkage between gold price and international commodity market Due to the sustained economic rise of BRIC countries such as China, Indian, Russian and Brazil, the demand for non-ferrous metals and other commodities continues to be strong, coupled with the speculation of international hedge funds, the prices of international commodities such as non-ferrous metals and precious metals have continued to rise strongly since 200 1, which reflects the linkage of commodity market prices. When judging the trend of gold price, investors must pay close attention to the trend of international commodity market, especially the price of non-ferrous metals. (IV) Interaction between gold price and stock market The development history of international gold market shows that, under normal circumstances, gold and stock market also run in the opposite direction. When the stock market rises, the price of gold tends to fall, and vice versa. However, because the mainland stock market in China is relatively closed, the rise and fall of gold price is not closely related to the mainland stock market, but has a strong correlation with some important overseas stock markets (such as new york, Tokyo and London). (V) Relationship between gold price and seasonal supply and demand factors in the market; supply and demand is the basis of the market. The price of gold is closely related to the supply and demand of the international gold spot market. The gold spot market often has a relatively strong seasonal supply and demand law. Spot consumption of gold in the first half of the year was relatively off-season. In recent years, the price of gold generally bottomed out around the second quarter. From the third quarter, driven by festivals and other factors, the demand for gold consumption will gradually increase. By the Spring Festival every year, influenced by the consumption of Asian countries, the demand for spot gold will gradually reach a peak, thus making the price of gold higher.