First, the negative correlation of gold and the dollar.
For a long time, because the price of gold is denominated in US dollars, it is directly influenced by the US dollars, so gold and the dollar has a great negative correlation.
First of all, the appreciation or depreciation of the dollar will directly affect the change of international gold supply and demand, which will lead to the change of gold price. From the demand of gold, because gold is denominated in dollars, when the dollar depreciates and gold is bought in other currencies, the same amount of money can buy more gold, thus stimulating demand, leading to an increase in demand for gold, and then pushing the price of gold higher. On the contrary, if the dollar appreciates, the price of gold will become more expensive for investors who use other currencies, which will curb consumption and lead to a decline in the price of gold.
Secondly, the appreciation or depreciation of the dollar represents people's confidence in the dollar. The appreciation of the dollar shows that people's confidence in the dollar has increased, thus increasing their holdings of the dollar and relatively reducing their holdings of gold, thus leading to a decline in the price of gold; On the contrary, the depreciation of the dollar led to an increase in the price of the dollar. For example, since the 1980s and 1990s, the American economy has developed rapidly, and a large amount of overseas funds have flowed into the United States. During this period, because the return from investing in other markets was much greater than that from investing in gold, investors withdrew from the gold market on a large scale, resulting in a continuous decline in gold prices for 20 years. After entering 200 1, the global economy fell into recession, and the exchange rate of the US dollar fell rapidly against other major countries. In order to avoid inflation and currency depreciation, investors began to return to the gold market, which made the trend of gold appear a key turning point. Since 2002, although the American economy has gradually emerged from the gloom of recession, it still faces many challenges due to the negative impact of the Iraq war. In 2003, overseas investors began to pay close attention to the twin deficits issue in the United States. Although the Fed tried to reduce the trade deficit through currency devaluation, this method did not seem to work. The attraction of the dollar to overseas investors is getting smaller and smaller, and a large amount of funds flow out to markets such as Europe. The subprime mortgage crisis in 2007 pushed the American financial crisis to a climax. The dollar depreciated rapidly, and the scale of gold investment also reached a record high.
It is worth noting that the negative correlation between the dollar and gold is not excluded from the long-term trend and the short-term situation. For example, in 2005, the dollar and gold rose simultaneously. The main reason for this situation is the political and economic turmoil in Europe: the integration process is facing the crisis of collapse due to the failure of the French referendum, and the European economy has been stagnant. Britain's economic development has stagnated and regressed. The European Central Bank, which should stimulate the economy by cutting interest rates, is in a dilemma because of the widening spread between the dollar and the euro. The current interest rate can only be barely maintained. The Bank of England cut interest rates to stimulate the economy, so the euro and pound were sold by the market. In the short term, investors can only return to the dollar and gold markets for safety, which has promoted the simultaneous rise of the dollar and gold.
Second, there is a positive correlation between gold and oil.
Gold and oil are positively correlated, that is, the price of gold and oil are usually positively correlated. The rise in oil prices indicates that the price of gold will also rise, and the fall in oil prices indicates that the price of gold will also fall.
First of all, the fluctuation of oil prices will directly affect the development of the world economy, especially the American economy, because the total economic output and crude oil consumption of the United States are the highest in the world, and the trend of the American economy will directly affect the changes in the quality of American assets, thus leading to the rise and fall of the dollar and the rise and fall of the price of gold. According to the estimation of the International Monetary Fund, for every $5 increase in oil prices, the global economic growth rate will decrease by about 0.3 percentage points, while the US economic growth rate may decrease by about 0.4 percentage points. When oil prices continued to soar, the International Monetary Fund immediately lowered its forecast for future economic growth. Oil prices have become a "barometer" of the global economy. High oil prices also mean that the uncertainty of economic growth increases and inflation expectations rise, which in turn pushes up the price of gold.
In the relationship between gold, oil and dollar, the price of gold is mainly denominated in dollar, and so is oil. In the early 1970s, after the collapse of the Bretton Woods system, the world monetary system built after World War II, the prices of gold and oil were separated from the fixed exchange rate with the US dollar, and the prices soared. There are both close ties and mutual checks and balances between them, and there is relative stability hidden in the mutual fluctuation, and there is absolute change in the surface stability. In the medium and long term, the fluctuation trend of gold and crude oil is basically the same, but the amplitude is different.
In the past 30 years, the price fluctuations of gold and oil denominated in US dollars have been relatively stable, with the average price of gold about 300 US dollars/ounce and the average price of oil about 20 US dollars/barrel. The average exchange relationship between gold and oil is 1 ounce of gold to about 16 barrels of oil. This ratio reached its peak in the middle and late 1980s, and 65,438+0 ounces of gold was exchanged for about 30 barrels of crude oil. However, due to the tight supply of crude oil, the price of crude oil rose sharply, while gold was relatively stagnant in the same period. So far, 1 ounce of gold can only be exchanged for about 12 barrels of oil. Judging from the current exchange ratio between oil and gold, there is still room for the price of gold to rise.
Third, the negative correlation between the dollar and oil.
The American economy has long relied on oil and the US dollar, and has mastered the pricing power of the US dollar by relying on its coinage right and monopoly position in the international settlement market. Through the super military force, nearly 70% of the world's oil resources and major oil transportation channels are under its direct influence and control, thus controlling the global oil supply and grasping the oil price. In the long run, the dollar depreciates and oil prices rise; When the dollar hardened, oil prices showed a downward trend.
Fourth, look at the trend of gold price from the relationship between the three.
From the above analysis, we can see that there are internal relations among gold, oil and US dollar. Judging from the current situation, it is too early to say that gold has turned from a bull market to a bear market, because:
First of all, due to the scarcity of resources, the supply of gold is declining, while the demand is rising, and the price is bound to rise.
Secondly, due to the same change relationship between oil and gold prices, the consumption of oil in the world economy is expanding day by day, and the rise in oil prices drives the price of gold to change in the same direction; In addition, judging from the historical exchange relationship between gold and oil, the number of barrels of gold for oil per ounce is low at present, and there should be room for the price of gold to rise.
Finally, despite the recent rebound of the US dollar, and even some investment banks believe that the US dollar will reverse the weak pattern that has lasted for many years, the rebound of the US dollar is based on the spread of the subprime mortgage crisis to Europe. No matter the real estate market or the financial market, the source of the subprime mortgage crisis, the American economy has not turned around obviously. Stagflation and twin deficits are a sword on the head of dollar rebound. The current market environment is similar to that in 2005. The euro zone economy is in trouble. Although the fundamentals of the US dollar are poor, it does not rule out that investors will return to the US dollar and gold markets to seek safety and promote the simultaneous rise of the US dollar and gold.
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