Analysts with basic analysis as the main analysis method have been studying the prices of gold mining companies, relevant information of government departments and reports of various institutions all day to speculate on the future trend of the market. The main factors involved in the basic analysis have been involved before, in a nutshell, they include:
(1) Political situation Political turmoil usually brings favorable conditions for gold prices. War will make prices rise and gold prices will be supported. World peace will adversely affect the price of gold.
(2) The increase or decrease of gold production will affect the balance between supply and demand of gold. The output of gold is the largest in South Africa, and any workers' strike or other special circumstances will affect its output. Secondly, the production cost of gold will also affect the output. 1992, due to the increase of gold production cost, many gold mines stopped production, which led to the high price of gold for a time.
(3) Government Behavior When the government needs to obtain foreign exchange, it will sell its gold reserves to obtain it regardless of the price of gold at that time. Correspondingly, the data of government gold recovery is also an important indicator affecting the price of gold.
(4) Demand for Gold Besides being a tool for preserving value, gold has more industrial and decorative uses. Changes in the production of electronics, dentistry, jewelry and other gold industries will affect the price of gold.
(5) the trend of the dollar. The dollar and gold are relative investment tools. If the dollar is strong, there will be greater gains from investing in the dollar, so the price of the dollar will be affected. On the contrary, when the dollar is in a weak market, investors will reduce their capital investment in the dollar and invest in the gold market instead, pushing the price of gold to strengthen.
(6) Inflation When the price index rises, it means an increase in inflation. The arrival of inflation will affect the preservation function of all investments, so the price of gold will also rise and fall. Although the role of gold as an anti-inflation weapon is not as good as before, the rise of Qualcomm will still stimulate the price of gold.
(7) Interest Rate Factor If the interest rate is raised, investors' deposits will get higher interest rates, which will have a negative effect on interest-free gold. On the contrary, falling interest rates will be more beneficial to gold prices.