«——【Preamble】】 ——
Gold is no stranger to everyone, right? It plays a pivotal role in the global financial market, and the most valuable thing you can think of is gold, and it can be said that gold is a hard currency at all times.
However, the international gold price has experienced a shocking plunge recently, and this sudden "crash" makes everyone inevitably a little worried.
«——[Federal Reserve's Monetary Policy·]——
As the central bank of the United States, the Federal Reserve's monetary policy has a profound impact on the global financial market. The Federal Reserve signaled that it would start cutting interest rates in early 2024, which made global investors optimistic about the market outlook and rushed to buy gold.
The Fed simply mentioned the matter, but it caused a huge wave in the gold market, and the early rate hike means that the cost of funds rises, and the cost of buying gold also increases, so those investors who hoard gold to sell choose to wait and see, and those who want to buy gold hesitate because of the price increase.
As a result, the gold market turned from a previous rally to a plunge, with prices falling sharply in a short period of time, which caught investors off guard.
At the same time, global commodity prices have also fallen sharply, oil prices have plummeted, and the U.S. stock market has fallen by more than 1%, and this sudden financial turmoil has severely impacted the global economic market.
The sharp fluctuation in the price of gold this time not only affected the confidence of investors, but also made some ordinary consumers who hoped for gold preservation panic, so why did the price of gold change so much in a short period of time? Is gold still worth buying?
«——【Reason for the Crash·】——
Under the influence of the current international situation, many people have begun to wonder whether the plunge in gold is related to the situation in the Middle East, where tensions have recently heated up, and the United States has sent warships to the Middle East, and even the deployment of aircraft carrier strike groups has not been ruled out.
Such military tensions tend to push investors to safe-haven assets, with gold being the top choice, and the escalating conflict between Israel and Iran, coupled with US military operations in the Middle East, should have driven gold prices higher.
If the Fed continues to delay interest rate cuts, global financial markets may face greater volatility, which in turn will affect gold prices, and further deterioration of geopolitical conditions may also push gold prices higher.
If conflict escalates in the Middle East, or if a new crisis erupts in other parts of the world, gold will once again be sought after as a safe-haven asset.
There is also the fact that inflation is one of the key factors affecting the price of gold. When inflation falls, investors may sell gold and move on to other investment opportunities.
Second, the United States owes a huge amount of foreign debt, and no one has purchased the bonds issued in recent years, which makes the United States likely to face a debt crisis, which will further affect the volatility of the gold market, and the United States needs to ensure the position of the dollar in the world, so it may encourage countries to invest in the dollar by letting the price of gold fall.
In January and February of this year, both US economic data and inflation data were better than expected, showing that there was no "hard landing" for the US economy, not even a "soft landing", which means that the Fed is likely not to rush to cut interest rates, and may even raise them.
Such a policy change has thrown global financial markets into turmoil, with investors' risk aversion fading and gold's attractiveness declining.
The Fed's policies have had a profound impact not only on the currency markets, but also on the stability and development of the global economy, and the Fed may be manipulating monetary policy with the intention of achieving broader economic and political goals.
This manipulation and control of the global economy may have a negative impact on investors and consumers, and the sharp fluctuations in the price of gold are obvious manifestations of this impact, so is gold worth buying for us ordinary people?
«——【Golden Future Trend·】——
Despite the risks associated with the gold market, gold remains attractive as a long-term investment, and its value is important due to its historically stable value retention properties during times of war and economic turmoil.
But investing in gold needs to be cautious, because we also know that the price of buying gold has actually risen a lot, but its actual value is not worth that much, and most of them are jewelry, there are some processing or manual fees, if you want to invest in gold, it is best to buy physical gold through gold wholesale channels, or invest in gold-related stocks or funds.
There is also the possibility of diversifying investment, avoiding putting all the money into the gold market, long-term fixed investment is a relatively safe strategy, investors can buy an appropriate amount when the price of gold is low, and gradually accumulate gold assets.
Overall, the volatility of the gold market reflects the instability of global financial markets, and there is still a lot of uncertainty about the future direction of gold prices against the backdrop of the Federal Reserve's high interest rate policy and the tense situation in the Middle East.
For example, those who follow the trend or do not have a firm opinion should grasp the present, even gold jewelry is worth a lot.
«——【·Conclusion·】——
The sharp fluctuations in gold prices remind us that the storm in the financial market often comes suddenly and violently, do not affect your choice because of temporary fluctuations, and do not speculate excessively, after all, in the current situation, no one can say the future trend.
So do you think it's cost-effective to buy gold now?
Resources
Observer.com: Is gold accelerating its crazy rally because the Fed screwed up?
CNR: The price of gold jewellery is approaching 720 yuan/gram, and the gold rush continues!
China Business Daily: Suddenly, gold has fallen, how to invest now?