1, USD
Compared with gold, the dollar is less stable, but more liquid. Therefore, the dollar is regarded as the first kind of currency, while gold is regarded as the second kind. As the expectation of a sharp interest rate hike by the Federal Reserve boosted the dollar and weakened the attractiveness of gold, the price of gold continued to fall.
2. War and political turmoil
I have to mention the ongoing Russian-Ukrainian war here. When the situation is turbulent, there will be huge inflation. Accordingly, the local currency is bound to depreciate, and economic development is greatly restricted. At this moment, people will aim at gold. But why does the price of gold fall instead of rising? Because, due to geopolitical considerations, when interest rates rise, the hedging behavior of turning to safe assets usually does not lead to a structural increase in gold prices. Gold is still subject to the situation Although there is room for further price increase, the price trend is likely to be unstable.
3. Oil price
Gold itself is a hedge against inflation, which is inseparable from inflation in the United States. The decline in oil prices some time ago means that deflation will follow, and the price of gold will also fall. This is the feedback of gold price to the change of oil price.
4. Gold supply and demand relationship
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. In addition, the application of new gold mining technology and the discovery of new mines have increased the supply of gold, which will of course cause the price of gold to fall.
Generally speaking, the decline of gold price is multifactorial, but at present it is short-term. When the conflict between Russia and Ukraine is gradually eased, the energy contradiction is alleviated, and the precious metal futures market is stable, the price of gold will gradually stop falling and slowly rise.