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Chapter 29 Gold Investment, Climb the "Pyramid" of Wealth (2)
When the demand for oil is one-sided, sometimes speculative funds will take advantage of the trend to fuel the oil price, so as to achieve the purpose of speculative profit.

Oil is the blood of industry, and its price positioning is crucial to the development of the world economy.The main factor affecting the price of oil is the relative relationship between the demand for oil and the supply of oil according to the degree of economic development.Of course, when the demand for oil is one-sided, sometimes speculative funds will take advantage of the trend to fuel the oil price, so as to achieve the purpose of speculative profit.There is a certain relationship between gold and oil, which is mainly reflected in a relatively positive relationship, but the relationship presents a complex and changeable situation.

When international crude oil prices continue to rise sharply, the economy suffers from "high blood pressure", and gold acts as a good medicine for safe-haven funds. Short-term safe-haven funds choose to swallow a large amount of gold to enhance immunity against economic high blood pressure , thus promoting the continuous rise of the international gold price.At this moment, crude oil and gold have a relatively high positive phase relationship, but this positive phase relationship is based on the operation of crude oil prices, and the rise in gold prices is reflected later.In addition, there are many factors that affect gold prices, and the operation of crude oil prices only forms a relatively large correlation at a specific time.

[-]. International political turmoil, war, etc.
Major international political and war events will affect the price of gold.The government pays for the war or to maintain the stability of the domestic economy, and a large number of investors turn to gold for value-preservation investment, which will expand the demand for gold and stimulate the rise of gold prices.For example, the Second World War, the US-Vietnam War, the 1976 Thai coup, and the 1986 "Iran Gate" incident all caused the price of gold to rise to varying degrees.For example, the terrorist organization's attack on the World Trade Center in the United States in September 21 caused the price of gold to soar to the highest point of the year - nearly 9 US dollars.

[-]. The impact of the stock market on the price of gold

Generally speaking, when the stock market falls, the price of gold rises.This mainly reflects investors' expectations on economic development prospects. If everyone is generally optimistic about the economic prospects, a large amount of funds will flow to the stock market, investment in the stock market will be enthusiastic, and the price of gold will fall.

In addition to the above-mentioned factors affecting the price of gold, the intervention activities of international financial organizations and the policies and regulations of the central financial institutions of the country and region will also have a significant impact on the changes in the world gold price.

Price fluctuation is the wind vane of gold investment. Gold investment should always pay attention to the change and trend of gold market price, and use it as the basis for trading.

Fast in and fast out of gold investment is the most taboo

Gold has been likened to a "voltage regulator" for family financial management.Gold is different from other credit investment products in that its value is natural, while the value of credit investment products such as stocks, futures, and bonds is endowed by credit, which has the risk of depreciation or even loss.In the face of inflation and disasters, gold has become an important hedging tool.The price of gold usually moves in the opposite direction to most investment varieties. Adding an appropriate proportion of gold to the asset portfolio can maximize the diversification of risks, effectively resist the sharp shrinkage of assets, and even increase the value of assets.

However, the small risk also means that the yield is relatively small, but even if the repurchase price is only 1 yuan per gram higher than the purchase price, it is still worthwhile than depositing money in the bank.According to estimates, if the price difference per gram is 5 to 7 yuan, then the investment income can reach about 3% to 4%.

One year ago, 1 ounce of gold could customize a fine suit in London; one year later, in London, 1 ounce of gold can still customize a fine suit.It is reported that in the investment portfolio recommended by wealth management experts in developed countries, the proportion of gold in household wealth management products is usually between 1% and 1%.This fully demonstrates the role of gold as a store of value.

In this regard, the level of political, economic, and social security of the country where the investor lives is different, which is also the main reference factor for the level of investment gold ratio.In our country, for ordinary families, it is usually best not to have more than 20% of the total family assets in gold.Only under the premise that gold is expected to rise sharply, this ratio can be appropriately increased.

There has always been a saying among the people that "buy gold with spare money".Because there are many factors that affect the price trend of gold, such as international politics, economy, international foreign exchange market, interest rates and monetary policies of major European and American countries, the increase or decrease of gold reserves by central banks of various countries, the rise and fall of gold mining costs, etc. The short-term price trend is difficult to judge.If you use the mentality and methods of short-term speculation in the stock market to speculate on gold, it may be difficult to achieve what you want.

Therefore, it is best to consider medium and long-term investment when investing in gold. As long as you know that gold is currently in a major upward cycle, even if you buy it at a relatively high level, or even get caught, it is not a serious problem.However, most experts believe that the opportunity to intervene in the gold market should be grasped, and it is best to choose a relatively low point to intervene.

In my country, personal gold investment has just been liberalized, and the gold investment market is far from mature.At present, my country's gold market is still in the cultivation stage.The investment channels are not yet perfect, and the investment varieties are not rich enough.Investment varieties such as gold index and gold fund generally used in the world are still blank in our country.Compared with paper gold, the biggest feature of physical gold investment is that it can be withdrawn.However, it is not possible to repurchase investors' gold.Many investors believe that if repurchase is not possible, the risk of real gold trading is too high.The inability to repurchase is still the bottleneck that is difficult for physical gold transactions to fully exert.

For gold investors, two issues must be considered.

First, the cost of band operations is very high. Physical gold bars are sold at a price increase, which is higher than the current gold market price; and when repurchasing, a handling fee of 3 to 10 yuan/gram is required.Therefore, only when the price of gold rises to a certain level can it be possible to cover the cost.If investors choose account gold instead of physical gold for swing operations, they can greatly reduce the cost and increase their own profits.

The second problem is that although the gold market has been in a bull market for several years, there has never been a market that only rises but never falls. Investors also need to recognize whether fundamental factors have changed during market corrections.

At present, the trend of gold is sluggish, but the enthusiasm for buying gold in the market has not subsided. "The main reason is that the gold market has been in a bull market for several years. What investors see is a market that only goes up but not down. Once the market pulls back, it will be a good investment opportunity." A financial expert from a bank analyzed.

Frequent transactions will increase costs. Gold investment should avoid fast in and fast out. A strategy of medium and long-term investment and long-term operation should be adopted to obtain income through long-term investment.

Get out of several misunderstandings of gold financial management

At present, the demand in the international gold market is strong, and the situation of short supply will not change in the short term, and various indicators have shown a long-term positive impact on the price of gold. The long-term trend of gold is still optimistic.With the continuous rise of international gold prices, the price of gold in the domestic market is also rising.Gold has increasingly become the "new darling" of investors, but at the beginning of the operation, some people tend to fall into the misunderstanding of investing in gold.

Misunderstanding [-]: Guessing the top and guessing the bottom

There are many factors that affect the price of gold. Under the current situation of intensified global inflation, the safe-haven function of gold has been strengthened, leading to an increase in demand for gold and a rise in gold prices.Since the lowest point can be met but not sought, it is recommended to buy when the price of gold is relatively stable or falling.

In addition, when buying and selling gold, one should not focus on the short-term gold price one-sidedly, while ignoring whether the gold price is in a "big bear" or "big bull" trend.But from historical experience, there is seasonal demand for gold.Since the end of the third quarter of each year is the wedding festival in India, the market demand for gold is strong, so the price of gold usually rises at the end of the third quarter and the fourth quarter of each year.

Misunderstanding [-]: Frequent short-term operations
As a non-professional ordinary investor, if you want to make money by fast in and fast out, you may end up disappointed.Inexperienced investors, after buying or selling a certain product at the beginning of the market, immediately think of closing the market to collect money as soon as they see a profit.Profit closing seems easy to do, but capturing the timing of profit is a science.Experienced investors will determine the closing time based on their own judgment on the price trend.If he thinks that the market situation will further develop in a direction favorable to him, he will be patient, knowing that it is beneficial but not making a profit, and allowing the price to develop, so as to continue the profit.

As a novice in gold speculation, it is best to consider medium and long-term investment. As long as you know that gold is currently in a major upward cycle, even if you buy it at a relatively high level, or even get caught, it is not a serious problem.However, most experts believe that the opportunity to intervene in the gold market should be grasped, and it is best to choose a relatively low point to intervene.

Misunderstanding [-]: Too many configurations
Gold is a medium-to-long-term investment tool. Investors must be psychologically prepared for long-term investment and collection. Don't look too much at short-term trends, and don't be lucky.In the process of investment, when the price of gold has risen a lot, investors must be cautious about whether to buy in large quantities.Although gold has the characteristics of long-term risk resistance, its return on investment is relatively low, and the proportion of gold investment in personal investment portfolio should not be too high.Therefore, investment must have the concept of investment portfolio, and it must be allocated according to personal assets to reduce risks.

Misunderstanding [-]: Investing heavily in gold jewelry
For family financial management, investment in gold jewelry is of little significance.Because gold jewelry is processed, merchants generally spend costs on the style and craftsmanship of the jewelry, which increases the added value, so the loss of realization is relatively large, and the value preservation function is relatively reduced. It is especially not suitable as the main investment product for family wealth management.

Misunderstanding [-]: Speculating on gold through illegal channels
Illegal channel speculation is more risky than gambling because it is extremely irregular in operation and management.Some investors once suffered huge economic losses due to illegal channels such as "London Gold" leveraged trading.At present, my country's relatively safe gold investment channels: first, physical gold business provided by commercial banks or gold companies; second, paper gold business provided by commercial banks; third, gold futures trading business provided by Shanghai Futures Exchange; fourth, Shanghai gold trading The T+D deferred delivery business of the exchange.

Investors must have sufficient risk awareness and necessary psychological preparation when investing in gold.At the same time, it is necessary to master the relevant basic knowledge of gold investment, such as gold trading varieties and their advantages and disadvantages, the pricing mechanism of gold, the fluctuation relationship between gold price, US dollar and international crude oil price, etc., and some basic analysis methods of gold investment.

(End of this chapter)