Major international political and war events will affect the price of gold. The government pays for the war or maintains domestic economic stability, and a large number of investors turn to gold to preserve their value. These factors will expand the demand for gold and stimulate the price of gold to rise. For example, World War II, the Vietnam War, the 1976 coup in Thailand and the 1986 Iran incident all caused the price of gold to rise to varying degrees.
2. The influence of international trade, finance and foreign debt deficit on gold price.
Debt is a worldwide problem, not just a unique phenomenon in developing countries. In the debt chain, not only the debtor countries can't repay their debts, which leads to economic stagnation, but the economic stagnation further intensifies the vicious circle of debt, and even the creditor countries will face the danger of financial collapse. At this time, countries will reserve a large amount of gold to maintain their own economies, which will lead to an increase in the price of gold in the market.
3. The monetary policies of various countries are closely related to the international gold price.
When a country adopts a loose monetary policy, due to the reduction of interest rates, the country's money supply increases, which increases the possibility of inflation and will lead to an increase in the price of gold. For example, the low interest rate policy in the United States in the 1960 s prompted domestic capital outflows, and a large number of dollars flowed into Europe and Japan. As the net dollar position held by countries increases, countries begin to worry about the value of the dollar.
So they began to sell dollars and snap up gold in the international market, which eventually led to the collapse of the Bretton Woods system. If the Fed raises interest rates gradually from 2004, there will be a bear market tide of gold in the days before and after each interest rate meeting.
4. The influence of inflation on the price of gold.
In the long run, if the annual inflation rate changes within the normal range, it will have little impact on the fluctuation of gold prices; Only in a short period of time, the price rises sharply, causing people to panic, and the purchasing power of monetary units declines, will the price of gold rise sharply.
Although the world entered the era of low inflation after 1990s, the use of gold as a symbol of monetary stability is shrinking. Moreover, as a long-term investment tool, gold has a lower yield than bonds, stocks and other securities. But in the long run, gold is still an important means to deal with inflation.
5. The influence of US dollar exchange rate on gold price.
The exchange rate of US dollar is one of the important factors that affect the fluctuation of gold price. Usually in the gold market, the dollar rises and the price of gold falls; When the dollar fell, the price of gold rose. If the dollar strengthens, it generally means that the domestic economic situation in the United States is good, domestic stocks and bonds in the United States will be sought after by investors, and the function of gold as a means of value storage will be weakened.
The decline in the exchange rate of the US dollar is often related to inflation and the stock market downturn. The value-preserving function of gold is once again reflected, and the price of gold has risen. Because the depreciation of the dollar is often related to inflation, and the value of gold is high, when the depreciation of the dollar and inflation intensify, it will often stimulate the preservation of gold and the increase of speculative demand.