The Risk Aversion Of Investors In Financial Markets Remains Strong.

Recently, a number of recent US economic indicators show weakness, which has brought some vitality to the precious metal market.

International gold prices rose 1.1% to $1295.2 an ounce on Tuesday.

Intraday gold prices hit an intraday high of $1296.3 an ounce, the highest level since last November 9th.

With the gold market prices rising sharply, the other three precious metals prices also climbed.

Among them, the international silver price rose 0.73%, to close at $17.8 an ounce.

Platinum prices rose 0.6% to $963.3 an ounce.

Palladium price rose 0.78% to $849.6 an ounce.

Generally speaking, if investors generally believe that there is a high degree of uncertainty in the global financial market, the price of precious metals will be promoted by risk aversion.

With gold and silver, etc.

Prices are rising sharply, and the price of index funds in the precious metals industry will also be higher, including the global X mineral company Index Fund (US stock code: SIL) and the iShares MSCI global gold mineral company index fund.

This year, the two precious metals industry index funds have risen 14.1% and 12.8% respectively.

By analyzing the historical trend of the panic index VIX and the international gold price listed on the Chicago stock exchange, analysts pointed out that there is a strong positive correlation between the panic index and the gold price, and international gold prices usually follow.

The trend.

When financial market investors' worries are heating up, precious metal assets such as gold and silver will be widely sought after by investors, which is inevitable.

Over the past week, the share price of precious metals mineral company has also started to rise. Not only that, the US dollar exchange rate index DXY is also an important market indicator affecting the price trend of precious metals.

This week, the US dollar exchange rate index hit the lowest level in the past seven months, with a single day drop of 0.18%, at 96.6 points.

This is a major positive for the precious metals market priced in US dollars.

Over the past thirty trading days, the US dollar exchange rate index has fallen by 2%, while gold prices have risen by 5.4% over the same period.

In addition, the depreciation of the dollar also led to a substantial increase in the prices of other precious metals such as silver, platinum and palladium.

Usually, with others

Like the assets priced, the US dollar exchange rate index has a negative correlation with the price trend of the precious metals market.

When the dollar begins to depreciate, for other countries' investors, the price of precious metal assets depreciated in US dollar denominated assets, so more capital will flow into the precious metal market such as gold and silver.

Therefore, the US dollar exchange rate index has the opposite trend with the gold price.

This year, the negative correlation between gold price and US dollar foreign exchange index is as high as 21%, which means that about 21% of US dollar depreciation will drive gold prices up.

In some cases, however, the dollar exchange rate may also rise at the same time as the price of precious metals, if the risk of financial market investors is very strong and a large amount of money has poured into the hedge assets.

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