The Behavioral Financial Study Of Global Gold Market's Anomalies

Under the complicated world financial system, gold not only plays the roles of national hedging instrument and monetary policy instrument, but also plays the role of financing and investment tools. In recent decades, the gold price has been increasing rapidly, one core reason for this phenomenon is the "anomalies" of the global gold market. Investors' lack of information results in their blindly following, excessive speculation, leading to the irrational boom of the gold market.This passage set the global gold market as our research object and the Efficient Market Hypothesis as our theoretical basis. We first analyzed the efficiency of the global gold market, and then we did the empirical study of gold market's weak-form efficiency on the basis of runs test. During the analysis, we found many anomalies that cannot be explained by traditional theories. Then we decided to conduct indepth research into these anomalies and we tried to explain anomalies such as the overreaction and underreaction of investors, the effect of sheep flock, and the bubble of the global gold market. This passage analyzed the main factors which affect the gold price, the gold price mechanism and the whole process of how global gold market operates. Finally, this passage came up with suggestions about how to perfect gold market's operational efficiency. Also we raised advices about how to alter the expectation of investors in order to avoid their blindly following and excessive speculation.