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Chapter 28 Gold Investment, Climb the "Pyramid" of Wealth (1)
Gold speculation can meet the needs of different investors

Gold has the characteristics of good physical properties, stable chemical properties, high ductility and scarcity. It is not only a special currency used for reserves and investment, but also an important currency in jewelry industry, electronics industry, modern communication, aerospace industry and other industries. important material.Gold once became the world currency before the 20s, and it still occupies a place in the international reserves of various countries. It is a special commodity with monetary, commodity and financial attributes.Compared with other investment tools, gold investment has irreplaceable unique advantages.To sum up, there are the following points.

[-]. The best mortgage product in the world
Since gold is an internationally recognized item, buyers do not have to worry about accepting it. Therefore, general banks and pawn shops will grant short-term loans of more than 90% of gold, and the housing mortgage loan amount shall not exceed 70% of the appraised value of the property.

[-]. There is no banker in the gold market

Any regional stock market is likely to be manipulated; but this will not happen in the gold market, because the gold market is a global investment market, and in reality no consortium or country has the power to manipulate the gold market .Just because the gold market is a transparent and effective market, gold investors also get great investment protection.

[-]. The price of gold fluctuates greatly
Quotations are made in accordance with international practice based on international gold market conditions.Due to the impact of various international political and economic factors, as well as various emergencies, the price of gold is often in violent fluctuations, and this price difference can be used for real gold trading.

[-]. Long transaction service time
The situation of each trader is different, and the business hours are also different. The maximum business hours are 18 hours a day, covering the main international gold market trading hours.

[-]. The settlement time of funds is short
Multiple reverse transactions can be carried out on the same day, providing more investment opportunities.

[-]. Simple operation

It doesn't matter whether you have a foundation or not, you can see it immediately; it is easier than stock speculation, and not as troublesome as stock selection. The whole world is speculating on this kind of gold, and there are no dealers.

[-]. Income Guarantee

When gold goes up, you go long and earn; when gold falls, you go short and you also earn! (Stocks can only make money if they rise, and lose money if they fall, or you can only wait and see).

Eight, the trend is good
Gold speculation has just emerged in China, and stocks, real estate, foreign exchange, etc. have all been indifferent, and gold can give people a refreshing feeling.

Nine, strong value preservation
Gold has been one of the best value-preserving products since ancient times, and has great potential for appreciation; especially inflation will promote the appreciation of gold.

Gold investment is simple and easy, easy to operate, high transparency, stable income, not easy to depreciate, strong value preservation, it is an ideal financial management tool.

What aspects should be paid attention to when frying gold for the first time

The crazy growth of the gold market has made many citizens who have never set foot in this field eager to move.So, what are the tips for frying gold?How should a novice get started?Here's what financial experts have to say.

[-]. Get ready

The openness of the gold market is between that of foreign exchange and stocks. Gold speculators can neither look out and focus on the international political and economic situation like foreign exchange financial management; Care about the domestic financial market.Gold speculators must pay attention to the factors affecting the price of gold in both the international and domestic financial markets, especially the exchange rate changes of the US dollar and the transformative provisions of the open domestic gold market for gold speculation policies.Therefore, novice gold speculators must learn more about political factors, economic factors, market factors, etc. that affect gold prices, and then analyze the trend of gold prices relatively accurately, grasp the general trend, and grasp the opportunity to make profits.

[-]. Choose the right time
Every year from mid-August to November, India, the largest consumer of the gold market, has several religious festivals, which will stimulate the demand for gold jewelry.In addition, the fourth quarter coincides with traditional gold demand peak seasons such as Western Thanksgiving, Christmas and the Chinese Lunar New Year. Therefore, before the end of the same year, there is bound to be room for gold prices to rise.Due to the time difference, the night in China is the daytime in London and New York, and it is the time when the gold trend fluctuates greatly. Therefore, it is better to seize the opportunity to watch the market at night. Around two o'clock.Gold investors can gradually build positions during the decline (referring to a rising market), invest a small amount of money first according to their personal circumstances, and then intervene in low-cost, easy-to-monetize gold varieties when the gold trend pulls back.

[-]. Intervention in batches

The risk of entering a full position is often very high, and the market is unpredictable, and even with the most accurate judgment, it is easy to make mistakes.Due to lack of experience, beginners in gold speculation should avoid investing all funds, and should invest in batches and installments.The funds can be divided into several equal parts, and when the first part is invested to make a profit, the second part is invested.In addition, it is necessary to keep enough margin in the transaction to avoid being forced to close the position due to additional margin calls once the investment direction is wrong.

If you are speculating on "paper gold", it is recommended to intervene in batches in the form of short-term small transactions, buying 10 grams each time you sell, and selling as long as there is a slight spread. Although this method is somewhat conservative, it is very suitable for novices. .In addition, it is very important to allocate funds correctly.

[-]. Buy low and sell high

Although there is a jargon called "buy up but not down", it refers more to industrial investment. For "value-preserving" commodities such as gold, it is better to absorb them at low prices and save costs.In other words, the lower the price, the more prominent the investment value of gold.Taking gold and silver commemorative coins as an example, the key to the success or failure of its investment lies in the timing of opening positions and the choice of commodities. Investors open positions when the market is low, and they can choose special, beautiful, rare, and cheap good varieties to hold. When the silver commemorative coin market reaches a climax, cash out all the chips you hold in order to maximize profits.

Five, carefully record

It is best for beginners to speculate in gold to record their transactions in detail every day to see if there are any event news or technical indicators that made you make a transaction decision, what is the transaction price, analyze it and record the profit and loss results.If the trading result is profitable, it shows that your analysis is correct. When similar or the same factors reappear, your trading records will help you quickly make correct trading decisions; Remind you not to make the same mistake again.

Sixth, stop losses in time, and avoid full positions
In order to prevent large capital owners from pushing in one direction, forcing their opponents to close their positions and squeeze them out of the game, it is recommended that investors: first, not fill their positions; second, stop losses in time.

Investors in futures gold should see the direction clearly when investing.But in the risk market, no matter how high your level is, it is impossible to make the right investment every time.If the investment direction is wrong, you can use the probability to stop the loss in time to avoid greater losses.For example, if an investor buys bullish gold futures, but the trend of the gold price is opposite to what he expected, it is recommended that when the price of gold falls by more than a certain level, he should immediately implement a stop loss operation, that is, close the long position.

Novices who speculate in gold for the first time should learn more about relevant knowledge, do more research on the gold market, and enter the market after being fully prepared.After entering the market, you must choose the right time, operate steadily, and don't let the risk exceed the originally set tolerable range. Once the loss has reached the original set limit, don't hesitate to close the position, and "cut the meat" to "cut the meat" ", the risk must be controlled.

Factors Affecting Gold Price Volatility

Like foreign exchange investment and stock investment, gold investment should always pay attention to market changes and trends. Factors that affect gold price fluctuations mainly include the following aspects.

[-]. Supply and demand

Gold price fluctuations are based on supply and demand.If the production of gold increases substantially, the price of gold will be affected and fall back.In addition, the application of new gold mining technology, the discovery of new mines, and the sale of gold by the central bank will all put pressure on gold prices.If it enters the peak period of gold consumption in India and other big gold-consuming countries, or there are reasons such as long-term strikes by miners, the overall supply will be less than demand, and the gold price will benefit from a rise.In recent years, the proportion of gold investment demand in the market has been increasing, and the impact on gold has become more flexible and sensitive. Therefore, every move in the financial derivatives market has an important impact on the trend of gold prices.

[-]. The impact of the US dollar exchange rate

Since the international gold price is denominated in US dollars, the interaction between the price of gold and the trend of the US dollar is very close. Usually, there is an inverse interaction relationship between the rise of the US dollar and the fall of gold, and the decline of the US dollar and the rise of gold.But in some special periods, especially when the trend of gold is very strong or very weak, the price of gold will also get rid of the influence of the trend of the dollar.For example, in the fourth quarter of 25, because international hedge funds were generally optimistic about commodity investment products such as oil and precious metals, large funds stepped in one after another, causing the interactive relationship between the gold price and the US dollar to fail for a while, and the gold price showed an independent trend. This factor must be fully considered when analyzing the trend of gold and the US dollar.However, when fundamentals, capital, supply and demand are normal, the reverse interaction between gold and the U.S. dollar is still an important basis for investors to judge the trend of gold prices.

[-]. The monetary policies of various countries are closely related to the international gold price

When a country adopts a loose monetary policy, due to the decline in interest rates, the country's money supply increases, increasing the possibility of inflation, which will cause the price of gold to rise.For example, in the 20s, the low interest rate policy of the United States led to the outflow of domestic funds, and a large amount of U.S. dollars flowed into Europe and Japan. Due to the increase in the net position of U.S. dollars held by various countries, there was concern about the value of the U.S. dollar, so they began to sell U.S. dollars in the international market and snap up gold. , and eventually led to the collapse of the Bretton Woods system.But after 60, the influence of the interest rate factor on the price of gold weakened day by day.

Fourth, the impact of inflation on the price of gold
In this regard, long-term and short-term analysis should be done, and it should be determined by combining the degree of inflation in the short term.From a long-term perspective, if the annual inflation rate changes within the normal range, then its impact on the fluctuation of gold prices will not be great; only in the short term, when prices rise sharply, causing people to panic, and the unit purchasing power of currency decreases, the gold price will be obvious. rise.After entering the 20s, the world entered an era of low inflation, and the use of gold, a symbol of currency stability, dwindled.Moreover, as a long-term investment tool, the yield of gold is increasingly lower than that of securities such as bonds and stocks.However, in the long run, gold is still an important means to deal with inflation.

[-]. The impact of crude oil prices
(End of this chapter)