Analysis Of The Factors Influencing The Price Of Gold

After the collapse of the Bretton Woods system since early 1970 s of the 20th century, the price of gold is no longer pegged to the US dollar but to be determined by the market. Since the 21st century, the gold price has gone through drastic fluctuations. The highest price was$1915 an ounce in September 2011, and the lowest was $1130 an ounce in November 2014, down more than 40%. Overall, changes in the price of gold is larger increased, which had a great effect national the country’s official reserves and personal investment.Which factor affects the gold price changes? Gold is different from general commodity, it is also different from the general financial products. However it has the property both of two aspects. As general goods, the price of gold will be affected by supply and demand change, the demand when gold prices, supply exceeds demand in gold prices fell. Usually, the supply of gold mainly comes from the three aspects, namely gold mineral resources, recycled, and the official sector sales. Gold demand is roughly from five aspects, namely the process requirements, manufacturing demand, investment demand, the official requirements and ETFs fund financial derivatives such as the demand side. Supply and demand changes will affect the price of gold.On the other hand, in the commodity attribute, gold has monetary and financial attribute. Gold as an investment is analyzed in this paper, Gold prices have been affected by the financial factors, usually includes currency, crude oil, the stock market, etc. Paper mainly discusses the dollar index, the change of oil prices, interest rates, inflation and the change of the DJI. These factors role in the price of gold in a specific way and the effect, the paper combining theoretical research and empirical research methods, trying to find its inherent law.For the medium and long term variable, this paper selected the 1977-2013, a total of 37 years of annual data analysis, according to the results of descriptive statistics analysis, it is concluded that the medium-term factors and changes in the price of gold. Paper focused on the short-term factors affecting the price of gold, selection of 21 years in 1993-2013 monthly data are described statistics and multivariate linear regression analysis, through analysis the following conclusions are drawn:the dollar index on the gold price has a weak negative correlation, oil prices on the gold price has a strong positive correlation, the interest rate index generally negative correlation with the price of gold, the DJI weak negative correlation with the price of gold, the rate of inflation in the empirical test, because with other factors exist strong collinearity, thus to eliminate it.Finally, the paper set up multi-level market system, cultivate the gold market participants, increase gold investment in financial derivatives, puts forward some Suggestions to accelerate the development of China’s gold market.