Secondly, the dollar is constantly depreciating, especially against the Japanese yen and the Swiss franc, which have fallen to historical lows respectively. In order to stimulate economic growth, the United States burned a lot of money and the fiscal deficit expanded sharply. The total national debt has reached 15 trillion US dollars. Therefore, the continued depreciation of the US dollar is the general trend. According to the law, the more the dollar depreciates, the more gold is favored.
Third, consumer demand is strong. Gold is also a consumer product. In recent years, the gold jewelry market, especially in Asia, is very hot. In addition to buying gold jewelry, gold bars and various gold coins are also hot items. In the UAE, people can buy gold bars through vending machines. It is reported that the consumption of gold jewelry reached 1760 tons last year, while the global annual output of gold was only 2,500 tons. Coupled with the surge in investment demand, the gold market is in short supply.
Fourth, investors are hot. In the economic downturn, gold, as an important financial investment tool, is popular among speculators. In particular, the financial crisis sowed the seeds of inflation, and the rescue measures and loose monetary policies in many countries led to an increase in the inflation rate in many countries. In order to cope with the risk of inflation, speculators bought a lot of gold. Last year, the demand for gold investment reached10.9 million tons.