Precious metals

The international gold market has formed a global market that operates 24 hours a day without interruption. It is a service system with a deepening international division of labor. Isolated markets with no characteristics will be gradually replaced.


Currently, the global gold pricing center is still in Europe and North America. As China's economic strength gradually increases, domestic gold investment will gradually have an impact on the pricing of the world gold market. Among them, the international spot gold trading centered on London has the most influence and is the world's largest gold trading market. As an OTC over-the-counter market, it once monopolized more than 80% of global physical gold transactions. Gold spot, it includes two methods of physical full transaction and spot deferred settlement transaction. Customers who need to buy or sell physical gold can use physical transactions, and investment customers can cash in profits through deferred settlement transactions. The flexible trading model of spot gold makes spot gold an excellent choice for institutions and individuals to invest in gold. It is the mainstream mode of global gold investment and also makes the spot gold market one of the world’s most influential and largest investment markets . Gold is the main investment product in the financial market and one of the largest investment markets in the world.


At present, most of the assets of domestic investors are mainly stocks, real estate, insurance and cash. The disadvantage is that these assets are relatively homogeneous, and under the influence of the same factors, it is easy to cause the risk of substantial fluctuations in the value of assets . Gold investment is favored by more investors due to its remarkable characteristics of value preservation and hedging. Therefore, holding a certain amount of gold in assets is of great significance to improving asset quality and anti-risk ability.


The value of gold investment is reflected in the following aspects:


1. Security:When there is severe inflation, economic crisis, war or natural disaster, the price of gold generally rises. Therefore, a certain amount of gold can be allocated in the asset portfolio. Resist the risk of asset impairment caused by the crisis.


2. Stability:Compared with securities and general commodities, gold investment shows good stability. Since the marketization of the gold price in 1971, the price of gold has been in a long-term upward trend, with an increase of 40 times so far, which is higher than the inflation rate and stock index increase in the same period.


3. Liquidity:Whether it is identification, transaction continuity or mortgage financing, gold has stronger liquidity than other investment products.


The relationship between gold investment and other investment markets:


1. Gold is closely related to the foreign exchange market

Although gold has been demonetized, it still has strong monetary attributes, especially the negative correlation with the U.S. dollar in long-term price changes. Analyzing and predicting foreign exchange trends is an important basis for analyzing and predicting gold price trends.


2. The relationship between gold and the securities market

Gold and securities markets are both cyclical investments, and there is a substitution effect between the two. Generally, when the macroeconomic cycle improves and returns to the securities market increase, funds will flow to the securities market; when the economic downturn leads to increased investment risks in the securities market, funds buy gold in order to avoid risks, leading to an increase in gold prices.


3. The relationship between gold and the commodity market

In the long run, gold has a positive correlation with many commodities. The sharp rise in crude oil generally means an increase in inflation expectations, which drives up the price of gold. The price movements of gold and other commodities also conform to this law.