Home Investment Academy The Impact of Inflation on the Price of Gold

The Impact of Inflation on the Price of Gold

2021-11-12 10:16:48

Since ancient times, gold has been a popular investment product. Gold speculation is actually a process of buying up and buying down through changes in the price of gold, and earning the difference from it. Fluctuations in the price of gold are the main factor that determines whether an investment can make money. There are many factors that affect the price trend of gold, such as the trend of the US dollar, economy, politics, military, inflation, etc. Here is an introduction to the impact of inflation on the price of gold.

What is inflation

It is generally defined as a comprehensive and continuous increase in the currency depreciation and price level caused by the amount of currency in circulation exceeding the actual needs of the economy under the credit currency system.

Inflation and currency depreciation are substantially different. In a more common language, the price level in a given economy generally continues to increase within a given period of time, resulting in a continuous decline in the purchasing power of money.

The impact of inflation on the price of gold

The currency rate affects the purchasing power of a country's currency. When the price of a country is stable and the currency rate is relatively low, the purchasing power of its currency will be very stable. At this time, the gold used for value preservation will not be so attractive to consumers, and the price of gold will naturally Affected and dropped.

When the price of a country fluctuates greatly, the inflation rate is high, and the price of goods is unstable, it will definitely cause people to panic. The purchasing power of the currency in people's hands decreases. Now that there is no guarantee, people will buy gold to maintain its value, and the price of gold will continue. rising.

The above is the relevant answers about the impact of inflation on the price of gold. For more knowledge about gold speculation, please pay attention to JRFX or consult online customer service. Welcome to download JRFX to open an account for gold speculation.

Risk Warning: The above content is for reference only, and does not represent JRFX’s position. JRFX does not assume any form of loss caused by any trading carried out in accordance with this article. Please consult your financial planner for your investment portfolios and manage your own risk.

JRFX is an online CFD broker providing more than 50 products for Forex, metals and commodities. Open a trading account within a minute. Deposit 100USD and download our MT4 trading platform now! We have unprecedented promotion program!

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