First, the reason 1, the dollar weakened. Excessive debt and inflation make the dollar a weak currency, and it is natural for gold and house prices to rise. Although gold does not generate income, it is the only asset with real value and liquidity. Most assets have only one feature: houses have real value, but they cannot be sold immediately; Stocks are liquid, but not as real as paper money; Various book assets may be worthless. Gold has been of real value for three thousand years, and its purchasing power is still equivalent to that of a hundred years ago. For example, in 1900, a good English farm was worth about 30 pounds per acre, or 7.5 ounces of gold; The current price is about 3000 pounds per acre, equivalent to 10 ounce of gold. Looking back1973-this period is the formation period of the modern dollar system that got rid of the gold standard-the fluctuation of the dollar has a close influence on the trend of the gold price. According to the report of the Federal Reserve, the correlation coefficient between the gold price at the end of the period and the major currency indexes of the US dollar is -0.45. Obviously, the correlation between the two is stronger than the correlation between gold price and inflation level. We might as well go one step further and shorten the time period to 1980, when the price of gold will hit a new high. The result is that the correlation coefficient between US dollar and gold price in the past 30 years is-0.65-highly negative correlation. This means that the dollar and gold are like the two ends of a seesaw, and there is a very obvious trade-off relationship. If the dollar rises, the price of gold will fall, and if the dollar falls, the price of gold will rise. Comparing these two charts, the effect is like a picture of a calm lake reflecting a mountain view. The ups and downs and gentle trends of gold prices are almost mirror images on the dollar chart. This shows that gold is not a commodity-at least it doesn't conform to the definition that people and industry consume a lot of goods. Paul Brodeur Ski, head of new york QB Asset Management Company, believes that "gold is a currency" and the daily price of gold is the weather vane for the market to judge the "possible weakening trend" of the purchasing power of US dollars and other paper money. If his analysis is correct, what really affects the gold market is the long-term trend of the dollar, not inflation or deflation. Some people will correctly point out that the historical high of gold price was produced in the latest inflation tide. If you think so, you probably misunderstood the situation. 1in the summer of 976, the price of gold began to rise for four years, which coincided with the weakening of the US dollar. At the end of 1980, the dollar grew against the trend and the price of gold began to fall. Among them, inflation is a supporting role at best, and it is definitely not the main force. 2. The second factor of gold rising is the strong demand for gold jewelry in Asia. In 2005, the jewelry market used 2736 tons of gold, worth about 40 billion dollars. The growth of jewelry sales is particularly evident in India. Indians regard gold jewelry as a form of investment, which is not only an important ornament for women, but also a symbol of family wealth. The last factor that affects the skyrocketing price of gold is the oil market. The turmoil in Nigeria shows that the oil market is unstable; Any major political or security problems in the Middle East may cause oil prices to rise above $0/00 per barrel. Now the price of a barrel of oil is equivalent to an ounce of gold. If the situation in Iraq or Iran deteriorates, the price of gold will still rise. Although people always want to save their bags for safety, these factors that support the high price of gold have existed for a long time, and the price of gold will not fall soon. Hedge funds may even push up the price of gold because they need opportunities to create a big wave of speculation. First of all, Greece and other euro zone countries are facing the risk of default, which worries investors. If a large amount of money is injected into the economy, the risks that the euro zone economy may encounter in the future will also increase greatly. Secondly, people begin to realize that the global economic recovery is bound to be a long and difficult process. In addition, the surge in global market funds has raised inflation expectations. Gold has always been regarded as a powerful tool to hedge inflation, and investors will naturally invest in gold to preserve its value. Finally, the rise of gold price is a self-circulating process. The rise in the price of gold will attract more investors to participate, thus further pushing up the price of gold. The depreciation of the dollar is basically inversely proportional to the international gold price, that is, when the dollar falls, the gold price rises, and when the dollar rises, the gold price falls. Specifically, for China, the price of gold has the following factors: ▲ Inflation expectation In the era of gold parity, gold has good anti-inflation characteristics. Until today, gold still has a certain anti-inflation effect. Since the outbreak of the international financial crisis, many countries have reduced interest rates to near zero and implemented quantitative monetary easing policies on a considerable scale. This has aroused investors' worries about future economic inflation and promoted the safe-haven demand for gold investment. ▲ Speculation is prevalent: Hedge fund speculation According to the information of the World Gold Council, the investment demand for gold has accounted for about 40% this year, while it was less than 19% last year. The future positions of IMM in the United States, which is widely concerned by the market, shows that speculators' bullish positions on gold are much higher than their bearish positions and remain at a high level. China and Indian investors are buying gold bars and coins at an unprecedented rate. According to the statistics of the World Gold Council, the demand for gold investment in China increased by 187% in the second quarter, reaching1400 million US dollars, while the demand in India increased by 38%, reaching1600 million US dollars. Buy gold that is regarded as a safe haven asset. Like gold, the price of silver has risen because investors are worried that paper money may depreciate as the government tries to prevent another recession. I have no confidence in the future dollar,' said Chad T. McNair, a silver investor. As we continue to print money to save banks and enterprises, we will continue to destroy the dollar. By then, hard assets will dominate the world.

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