The demand for gold is directly related to its uses.

(1) Changes in 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 been affected by the financial crisis. Gold imports have been greatly reduced since 1997. 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 for value preservation.

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 and the trading system of the gold futures market to "short sell" or "replenish" gold in large quantities based on international and domestic situations, artificially creating 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 the price of gold at that time.

Other factors:

(l) Impact of U.S. dollar exchange rate.

(2) The monetary policies of various countries are closely related to the international gold price.

(3) The impact of inflation on gold prices.

(4) The impact of international trade, finance, and foreign debt deficits on gold prices.

(5) International political turmoil, war, etc.

The above article was written by Zhang Huilijin, chief analyst of the Luanjia Jinzheng team. The content of the article is for reference only and does not constitute investment advice. Investment involves risks. Investors operate accordingly at their own risk. Please indicate the source when reprinting.