Reasons for the fall of gold price

1, the change of US dollar exchange rate will also affect the price of gold, and the price of US dollar and gold will change in the opposite direction;

2. Monetary policy will also affect the price of gold. If the country adopts a tight monetary policy, the price of gold will rise;

3. When a country's purchasing power increases, the price of gold will fall accordingly;

The stock market also has an influence on the price of gold. When investors put a lot of money into the stock market, the price of gold will fall;

5. Oil price will affect the price of gold. When oil prices fall, so will gold prices. These are all possible reasons for the sharp drop in gold prices.

Changes in the exchange rate of the US dollar will also affect the price of gold, and the price of the US dollar and the price of gold will change in the opposite direction; Monetary policy will also affect the price of gold. If the country adopts a tight monetary policy, the price of gold will rise. When a country's purchasing power increases, the price of gold will fall accordingly; The stock market also has an impact on the price of gold. When a lot of money is invested in the stock market, the price of gold will fall.

When investors invest in gold, there are many ways, such as investing in gold bars, coins and gold jewelry. Also buy gold certificates, gold futures, gold funds, etc. Participate in gold investment. It's just that when investors invest in gold, they need to know that gold investment is a relatively stable investment, and investors don't have to worry about the sharp drop in gold prices, resulting in a big loss of funds. Because even if the market plummets and the economy is depressed, the price of gold will not fall easily, but it will rise with the downturn of the market.

The reason for the fall of gold. The precipitous decline of precious metals last week cannot be simply attributed to the progress of vaccine development in Russia and other factors. It needs to be analyzed from the perspective that precious metals are assets to hedge inflation, and at the same time, it should be recognized that liquidity plays a vital role in the financial attributes of precious metals. This determines the subsequent trend of precious metals. _

The revision of inflation expectations is more likely to be the main driving force for the current round of precious metals decline, but the shortage of liquidity will be the main driving force for the new round of decline. The logic of the long-term rise of precious metals has not changed. The most critical medium-term strategy is that the time for bargain-hunting is not so fast.

The essence of gold is an asset to hedge against inflation and pre-debt. Then the expectation of inflation is the fundamental driving force for the rise of gold, and it can also be simply understood as a hedge against the release of a large amount of liquidity by the Federal Reserve. First of all, from the perspective of the Federal Reserve's monetary policy, according to Fisher's basic formula, inflation = nominal interest rate _ real interest rate, and the inflation level represented by monetary policy (purple line) should be equal to = real interest rate of federal funds (red) _ 10-year US bond yield (green). The actual inflation expectation in the market is expressed by the yield of US TIPS bonds (yellow), and we will find that the growth rates of the two are obviously inconsistent since March. This deviation is actually that the market's expectation of inflation has exceeded the actual representative level of the Fed's monetary policy. The deeper meaning behind this is that the interest rate level of the Federal Reserve can't last as long as the market expected, and the market has gradually begun to realize this problem. The oil price that has never been broken has made investors continue to trade inflation expectations.

In fact, since last week, there has been an inflection point between the two (before gold fell), which means that the logic of trading inflation should return to the level shown by the Federal Reserve's monetary policy. Or you can understand that this is the monetary policy revision brought by the Fed's insistence on not implementing negative interest rates under the pressure of the epidemic, which finally led to the market's confirmation, which is also the main driving force for this round of gold decline.