Analysis Of Factors Affecting Gold Price Trend

Gold is a functional commodity with hedging function.It has played a very important role in the human history.Gold is the earliest known form of money.Under the background of the massive US dollar issuance in 2020,gold can be serve as a hedge against the risks of stronger US dollar index and lower interest rate,and it can also resist inflation risks partly.Whether from the perspective of national policy executors or individual investors,rational allocation of an appropriate amount of gold can optimize asset allocation and hedge risks to a certain extent.Based on the above background,this paper will focuses on these following issues:Firstly,gold price and several important economic indicators such like economic cycle,US dollar index,interest rate and inflation.In the long-term and short-term,this paper analyzes whether there is a mutual influence relationship,and whether these indicators can be used as a reminder for the trend of gold price;Secondly,analyze the relationship degree of these economic indicators and the reasons between the gold price and these economic indicators.In this paper,we study the research results of domestic and international scholars on the factors influencing the gold price,and will further extend these research results.This paper analyzes the long-term influence trend of gold price through the economic cycle combined with the Merrill Lynch clock model;explores the relationship between short-term factors and gold price by constructing VEC model,analyzes the time fluctuation of each variable on gold price shock by establishing impulse response analysis,and establishes variance decomposition,and finally analyzes the contribution of each factor to the fluctuation of gold price.Finally,this paper will put forward corresponding policy suggestions with the empirical results.Translated with www.DeepL.com/Translator(free version)The conclusions of this paper:There is a certain cycle law between gold price and long-term factors economic cycle;from the short-term factors to see,the dollar index will be higher in the short term gold price will be lower,but in the long term the two trends are the same;interest rate is higher in the short term gold price fell,but in the long term interest rate will eventually drive gold price higher;inflation indicator is higher will push up gold price in the short term,but in the long term The influence relationship between the two is reduced.The price of gold is most affected by the price fluctuations of its own commodity properties,and the impact tends to be stable in the long run,the second most influential factor is the interest rate,followed by inflation and the dollar index.