What are the four main factors that affect the fluctuation of gold prices in China?

2023-06-05
Summary:

Understand the four main factors influencing gold prices in China and how they impact market dynamics and price fluctuations.

Gold has a global trading market, and any change in factors that will affect the price of gold will quickly reflect on the price of each gold market, so gold trading in each gold market also has common influencing factors. Below, together with the editor of Jinrong China, we will reveal the four main factors that affect the changes in China's gold price:

What are the four main factors that affect the fluctuation of gold prices in China?

1、 International gold price

At present, China's gold market uses the Chinese yuan as the pricing and delivery currency. However, due to the pricing power of the international gold market being dominated by the United States, the domestic gold price in China is also determined based on the international gold price. There is a significant correlation between domestic and international gold prices, and changes in international gold prices can also lead to changes in China's gold price.

The factors that affect the international gold price generally include the trend of the US dollar, geopolitical factors, oil prices, global gold supply and demand, stock market changes, inflation, and so on. When these factors change, they will cause fluctuations in the international gold market and are factors that investors need to pay special attention to.


2、 Gold futures price

At present, the main trading venue for gold futures in China is the Shanghai Futures Exchange. Before the expiration date of gold futures, the prices of gold spot and futures are different, and time costs, holding costs, and other factors are the main reasons for the price differences between the two. The warehouse receipts of the Shanghai Gold Exchange and Shanghai Futures Exchange in China cannot be exchanged yet, so the mutual circulation costs between gold futures and spot markets will also increase, Affects the trend of gold prices.


3、 RMB exchange rate

Due to the fact that China's gold is priced in RMB, while international gold is priced in USD, if the exchange rate between RMB and USD remains fixed, investors do not have to bear exchange rate risk when purchasing domestic gold. If the ratio between RMB and USD is no longer fixed, investors will have to bear exchange rate risk when purchasing domestic gold.


4、 Stock price index

Usually, the price trends of gold and stocks are opposite, especially when the stock market is in turmoil and prices rise. Investors will choose to withdraw funds from the stock market to purchase gold products as a hedge. The increasing demand in the investment market will also have a certain impact on the price of gold.

In summary, there are many factors that affect the fluctuation of domestic gold prices, but the four main factors mentioned above that affect the fluctuation of gold prices in China can have an impact on gold prices through mutual interaction or chain reaction. Investors should comprehensively analyze and improve the accuracy of market judgment when conducting investment transactions.


【 EBC Platform Risk Reminder and Disclaimer 】: There are risks in the market, and investment needs to be cautious. This article does not constitute investment advice.

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