Although the dollar is not as stable as gold, its liquidity is much higher than that of gold. So the dollar is considered as the first currency, and gold is the second. When the international political situation is tense and uncertain, people will buy gold because they expect the price of gold to rise. Simply put, the dollar is strong and gold is weak; Gold is strong and the dollar is weak. Although gold itself is not legal tender, it still has its value and will not depreciate into scrap iron. If the dollar is strong and there is a great chance of appreciation, people will naturally chase it. On the contrary, when the dollar weakens in the foreign exchange market, the price of gold will strengthen.

Second, war and political turmoil.

In times of war and political turmoil, economic development will be greatly restricted. Due to inflation, any local currency may depreciate. At this time, the importance of gold is fully demonstrated. Because gold has recognized characteristics and is an internationally recognized trading medium, people will invest in gold at this moment. Buying gold will inevitably lead to an increase in the price of gold.

Third, the world financial crisis.

When the financial system of the United States and other western powers is unstable, world funds will be invested in gold, and the demand for gold will increase, and the price of gold will rise. At this time, gold played the role of a financial refuge. Only when the financial system is stable, investors' confidence in gold will be greatly reduced, and selling gold will lead to a decline in the price of gold.

Fourth, inflation.

We know that the purchasing power of a country's currency is determined by the price index. When the price of a country is stable, the purchasing power of its currency is more stable. On the contrary, the higher the inflation rate, the weaker the purchasing power of money and the less attractive it is. If the price index in the United States and major regions of the world remains stable, holding cash does not depreciate, and there is interest income, it will inevitably become the first choice for investors. On the contrary, if inflation rises sharply, there is no guarantee to hold cash at all, and interest can't keep up with the sharp rise in prices. People will buy gold because the theoretical price of gold will rise with inflation. The higher the inflation in major western countries, the greater the demand for gold as a safe haven, and the higher the world gold price will be. Among them, the inflation rate in the United States is the most likely to affect the change of gold. In some smaller countries, such as Chile and Uruguay, the annual inflation rate can be as high as 400 times, but it has no effect on the price of gold.

Verb (abbreviation for verb) oil price

Gold itself is a hedge against inflation, which is inseparable from inflation in the United States. Rising oil prices mean that inflation will follow, and so will the price of gold.

Intransitive verb national interest rate

Investing in gold will not earn interest, and the profit of its investment depends entirely on the price increase. When the interest rate is low, there will be some income from investing in gold; However, if the interest rate rises, it will be more attractive to collect interest, and the investment value of interest-free gold will decline. Since the opportunity cost of gold investment is high, it is more stable and reliable to put it in the bank to collect interest. Interest rates are closely related to gold, especially in the United States, when interest rates rise, the dollar will be absorbed in large quantities and the price of gold will be frustrated.

Seven. economic situation

Prosperous economy and carefree life will naturally enhance people's desire to invest, people's ability to buy gold for preservation or decoration will be greatly increased, and the price of gold will be supported to a certain extent. On the contrary, people live in poverty. During the economic depression, people can't even meet the basic guarantee of food and clothing. Where are they interested in investing in gold? The price of gold is bound to fall. The economic situation is also a factor that constitutes the fluctuation of gold prices.

Eight, the supply and demand of gold.

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 definitely reduce the price of gold.