The most popular three-level framework that determ

The "three-level" framework that determines the trend of international gold prices

International Spot gold fell after hitting a seven week high last Friday. The rise in gold prices was limited by multi position profit taking, but it still recorded the third consecutive day. 4. Frequent use of this equipment for tensile breaking experiments may cause some fasteners to rise in a loose week, once reaching a seven week high of $1206.98 per ounce. Trump did not clarify the fiscal stimulus policy at the meeting on the 11th, which led to a rebound in risk aversion demand. Obviously, since hitting a new low in mid December last year, the gold price has risen by 6.5%, and there is no small room for profit taking. With regard to trump's new deal, several Fed officials warned on the 12th that Trump's fiscal and tax cuts may work in the short term, but will trigger debt and inflation in the long term, potentially increasing the demand for gold to hedge inflation

there have always been different opinions on the factors that determine the international gold price. Putting aside political and war factors, we can roughly summarize the "three-level" framework that affects the international gold price from a purely economic perspective: the real interest rate level of the United States, the expected real interest rate level of the United States, and the relative expected real interest rate level of the world

since the non monetization of gold in the Jamaican system was implemented in 1979, gold has ostensibly removed its monetary function and is only used as a non profitable hedging asset. Its hedging value is highlighted only when all major categories of assets have extremely low returns and high risks. The hedging value of gold can be measured by the real interest rate (real interest rate = nominal interest rate - inflation rate). The higher the real interest rate, the smaller the value of gold, while the lower the real interest rate, the greater the value of gold. After the non monetization of gold, the global currency anchor is the US dollar. Therefore, the real interest rate of the United States is the leading factor determining the international gold price. According to the historical data of the United States, whenever the inflation rate (CPI) is higher than the current interest rate, the gold price tends to strengthen. If the real interest rate is 2%, the gold price will fall

however, sometimes there are situations where the real interest rate in the United States is still relatively high but the gold price has begun to rise. This is mainly because the market is dominated by expectations. The factor that determines the gold price is not a simple real interest rate, but an expected real interest rate (expected real interest rate = expected nominal interest rate - expected inflation rate). When the expectation of interest rate increase is strong, the expected real interest rate will rise. At this time, the gb/t7314 (2) 005 tightening method for metal materials at room temperature is empty of gold. If the expectation of interest rate increase is not strong and the market inflation expectation is strong, the expected real interest rate will decrease, which is conducive to gold. However, whether the gold price continues to rise depends on the strength of the real interest rate at that time and the expected real interest rate

since the 2008 international financial crisis, the major central banks in the world have released excess liquidity to the world in the process of successive easing. Since the European central bank implemented negative interest rates in 2014 and the Bank of Japan joined in 2016, the interest rate gap between Europe and Japan and the United States has widened. Therefore, global liquidity has become extremely sensitive to the movements of the European and Japanese central banks. Due to the interest rate gap between the expected real yield of the United States and the euro and yen, the determinant of the gold price has become the expected real interest rate of the United States relative to the euro and yen, that is, the relative expected real interest rate (relative expected real interest rate = the expected real interest rate of the United States - the expected real interest rate of the euro and yen). It can be seen that the estimation of changes in international gold prices depends not only on the Federal Reserve, but also on the European Central Bank and the Bank of Japan. If the withdrawal of Japan or the European Central Bank from quantitative easing causes the expected real interest rates of the euro and the yen to rise, the dollar will fall, which is bound to lead to the expected real interest rates of the United States to rise, resulting in a rise in the relative expected real interest rates, which is bad for gold prices

from the perspective of the expected real interest rate of the United States, it is currently in the stage where the expected rise in nominal interest rate is greater than the expected inflation rate. Therefore, the expected rise in real interest rate constitutes a negative impact on the international gold price. In the future, if the expected inflation rate in the United States is lower than the market expectation or the unemployment rate rises, the expected inflation rate will change the expected trend of the nominal interest rate, so that the nominal interest rate will turn down, and the expected decline is large, then the expected real interest rate will fall, which is beneficial to gold

from the perspective of global relative expected yield, at present, due to its own restrictions and the debt purchase ratio of the bond market approaching the limit, the Bank of Japan has obvious traces of withdrawing from the easing policy. Unless the United States has a larger easing policy again, even a larger fiscal deficit policy will also make Japan have an excuse in terms of fiscal deficit and follow the United States to implement an active fiscal policy, Create conditions for fiscal monetization, otherwise there is no reason for Japan not to withdraw from the loose monetary policy. Although Europe has reduced the scale of debt purchase, the reduction does not affect its quantitative easing debt purchase limit, and the extension of the period to the end of 2017 shows its strong determination of quantitative easing. Therefore, as long as there is no accident, as Europe gradually withdraws from the loose monetary policy, the interest rate gap between Europe and the United States is bound to further narrow, thus passively pushing up the expected nominal interest rate of the United States, thereby raising the expected real interest rate, thereby curbing the gold price. If the United States can maintain a strong expected rise in nominal interest rates, Japan's quantitative easing exit assumption will continue, which will also make gold weak on the whole. If the nominal interest rate of the United States turns downward, the Japanese policy will become the booster of the global relative expected yield, accelerate the nominal interest rate, and then lead to the decline of the real interest rate. If this happens, it will have a large and long-term upward stimulus effect on the international gold price