What are the factors influencing the trend of paper gold?
For investors, it is the most important thing to buy paper gold to maintain its value. So for paper gold, what are the factors influencing the trend of paper gold? Let's meet you today.
The main influencing factors of paper gold price include supply-demand relationship, US dollar exchange rate, monetary policy, inflation, international political situation and war, economic situation, etc.
In addition, compared with other gold, paper gold does not need to distinguish the authenticity and quality, has no storage costs, and has low transaction fees; it has no leverage ratio and has less investment risk; at the same time, paper gold adopts T + 0 delivery mode, which can be repeatedly traded, has more opportunities for disconnection operation, and can be traded 24 hours a day.
1、 Dollar index
As the price trend of paper gold is basically consistent with that of international spot gold, and the international spot gold is priced in US dollars. When the US dollar index falls, gold rises, while when gold falls, the US dollar index is often on the way to rise. Gold and the US dollar are negatively correlated in most of the year. Therefore, the relationship between paper gold and US dollar index is also negative.
2、 Supply and demand factors
From the world gold demand distribution chart, we can know that gold demand is mainly divided into four categories: industrial consumption demand, gold jewelry manufacturing demand, international reserve demand and investment demand.
Due to the characteristics of gold reserves and asset preservation, there is still investment demand for gold. For ordinary investors, gold investment is mainly in the case of inflation, to achieve the purpose of asset preservation. Take China as an example: China's inflation rate remains high, more and more people choose to take money out of the bank and then invest, and physical gold bars, gold commemorative coins and other gold products have become one of the best choices.
According to the world gold association's "2011 gold demand trend report", China's gold demand was 769.8 tons, up 20% year-on-year. The largest increase came from the investment field, with the investment amount reaching 84.5 billion yuan, up 69% year-on-year. It can be seen that the growth of China's gold demand mainly benefits from the pull of investment demand. China's import of gold soared in April, which did not exclude the intervention of real estate and stock market funds.
3、 Exchange rate effect
The US dollar exchange rate is also one of the important factors affecting the fluctuation of gold price. Generally, there is a rule in the gold market that if the US dollar goes up, the gold price will fall; if the US dollar falls, the gold price will rise. The strong US dollar generally represents a good domestic economic situation in the United States. The 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 is weakened; while the decline of the exchange rate of the US dollar is often related to inflation and the downturn of the stock market, and the value preservation function of gold is reflected again.
4、 International price
When a country adopts loose monetary policy, due to the decrease of interest rate, the money supply of the country will increase, which will increase the possibility of inflation and cause the rise of gold price. For example, the low interest rate policy of the United States in the 1960s prompted the outflow of domestic funds, and a large number of US dollars flowed into Europe and Japan. As the net position of US dollar increased, countries began to worry about the value of the US dollar, so they began to sell US dollars in the international market and rush to buy gold, which eventually led to the collapse of the Bretton Woods system.
In this regard, we should make a long-term and short-term analysis, and combine the degree of inflation in the short-term. In the long run, if the annual inflation rate changes within the normal range, then its impact on the fluctuation of gold price is not big; only in the short term, when prices rise sharply, causing panic, and the unit purchasing power of money decreases, will the gold price rise significantly.
The above is about the factors that affect paper gold. I hope it will be helpful to you after reading the articles organized by Xiaobian. If you like the articles published by small editors, you can continue to pay attention to us. The small editors will update and release them from time to time!
Disclaimer: the content of this article (including but not limited to the text, pictures and other contents) is from the community users' contribution, the viewpoint of this article does not represent the position and viewpoint of this website; if there is any false information or careless infringement of your rights and interests, please contact to inform, and we will correct or delete it as soon as possible after verifying the situation!