Decode Global: Gold prices continue to rise, how can we capitalize on the opportunity

In 2022, the international gold price in US dollars continued to fluctuate. Affected by the Federal Reserve and other developed economies central banks sharply raise interest rates, international gold prices have been pressured. However, since the fourth quarter of 2022, the international gold price has gradually shown a warming trend, and it has ushered in a "good start" this year, and the gold price has generally shown an upward trend from the beginning of the year to the recent future. Although there have been adjustments in recent days, in view of the geopolitical tensions between Russia and Ukraine, as well as the re-entry of some bargain hunters, and the US economy may not avoid a slowdown or even recession, it is still very likely to support the upward trend of gold prices in the medium and long term, which is also an opportunity for investors.

The rise in gold prices was actually foreboded as early as the second half of 2022!

The World Gold Council said that in early 2022, it received a survey report from 57 central banks around the world, and in 12 months, 25% of central banks planned to increase gold reserves, 70% said it was unchanged, 5% said it "did not know", but overall no central bank responded to reduce reserves.

Therefore, as of January 9, 2023, gold stocks generally closed up, as of the close, Zijin Mining rose 10.23%, Zhaojin Mining, Shandong Gold, China Gold International all closed up sharply. The gold market also led the precious metals sector to follow up, China Silver Group closed up 4.82%.

So what factors affect the price of gold?

One: Political factors

"Buy gold in troubled times, hide antiques in prosperous times" this saying has been passed down through the ages is definitely not an empty wind. The first reason is that although there is no war, the economic and financial crisis has caused people to worry about fiat money (state-issued currency), so they will rush to gold.

Two: Central bank activities

Central banks are big holders of gold, and their willingness to hold gold directly affects the price of gold. If central banks buy or increase their gold holdings, gold prices rise; Conversely, if central banks sell gold, then the price of gold will weaken. As central banks continued to sell gold in the late 1990s, gold continued to weaken, at one point falling to a record low of $265 an ounce.

Three: consumption factors

That depends on the economy. When the economy is good, people's income increases, consumption will increase, gold and silver hand jewelry becomes the object of consumer purchase, and the growth of demand stimulates the rise of gold price. On the contrary, if the economy is poor and consumers are less willing to buy, the gold price will be affected by the decline in demand.

Four: Investment

Because gold itself is worth investing in. In addition to the buying and selling of the older generation, the most accessible and easier for ordinary people to participate in gold investment is - gold foreign exchange!

Gold Forex trading is a term used to talk about a way of laying out the gold market through the foreign exchange market by not buying or selling the precious metal, or betting on its price through futures, but by trading gold through dollar-denominated currency pairs or gold-related currency pairs.

Trading gold on the Forex market can be a good way for forex traders to trade this commodity and diversify their portfolios. Gold's stability relative to other assets during the global crisis has made it a popular tool to fight inflation. Before and after major market events, jittery investors pay close attention to the commodity and rush to safety.

Of course, the intricacies of the forex market cannot be explained in a single sentence. For more information, please visit the official website of Decode Global.

At the same time, in order to help give back to the users in the industry, Decode Global has launched a subversion of the traditional trading model of CFD on its dedicated trading platform. 0 commission trading all platform products, which means that the trading fee has been reduced from the original two-way fee of $7 to 0, your trading cost is limited to the spread of the relevant product.

The above information is provided by Decode Global Limited (VFSC 700415) and the information contained therein is for educational/discussion purposes only and does not constitute an offer or incentive to buy or sell any financial instrument. Any information and general financial product advice mentioned above is generic and does not take into account your financial situation, needs and personal goals. Any examples or statistics included here are for illustrative purposes only. Therefore, Decode Global will not be liable for any loss resulting from your decisions based on its information.