On the relationship between the stock market, the dollar exchange rate and the crude oil and gold price

On the relationship between the stock market, the dollar exchange rate and the crude oil and gold price

There are many factors that affect stocks, currencies, oil prices and gold prices. In general, however, there is an interaction between them.

I. Stock market and crude oil prices

If the stock market falls, it is generally regarded as a symptom of bad economic situation, the economic situation is bad means that crude oil demand decline. There are fewer people buying crude oil, and oil prices will fall naturally. Conversely, if the stock market rises, oil prices will rise. In this case, the stock market and

There is a positive correlation between oil prices.

Ii. stock market and commodity futures

The stock market is often influenced by speculative factors, which creates the other case that when the stock market falls, the investor pulls the money out into the big

Commodity futures markets, such as the crude oil market, the gold market, and so on, the price of oil and gold will rise instead.

Third, the dollar exchange rate and oil prices and gold price

Money is the measure of the value of a commodity. When the value of a commodity increases, the currency is relatively devalued and the value of the commodity decreases. The dollar as a global currency, its exchange rate to some extent reflects the value of global commodity trade. At present, global commodity trading is mainly

Based on the dollar price, the world's foreign exchange reserves in the United States dollar accounted for about 65% of the level, the trend of the U.S. dollar exchange rate on commodity exchanges, futures markets and the redistribution of economic interests in various countries have a significant impact. The impact of the dollar exchange rate fluctuation is large, such as gold, crude oil, metals and other large

Goods.

(a) US dollar exchange rate and gold price

Gold is a reserve of money, although the dollar actually plays the role of gold in the past, gold or monetary policy has a certain effect, is a means of dealing with inflation, it is an alternative to the dollar, the main function of gold in the market is the reserve currency and hedging

Tools.

The strength of the dollar is an important factor affecting gold prices. There are three main reasons for this:

First, the dollar is the world's recognized hard currency, the dollar and gold are international reserve assets, the strong dollar weakened the gold as reserve assets

And the position of the hedging function.

Second, the U.S. GDP accounted for about 1/4 of the world's GDP, total foreign trade in the world first, the world economy is affected by it, and the gold price

And the world economy is a reverse relationship.

Third, the world gold market is generally priced in dollars, the dollar depreciation on the one hand will inevitably lead to gold prices, on the other hand, the dollar-denominated gold for the holders of other currencies is cheap, which will stimulate the demand for gold. Therefore, the trend of the dollar and gold should be the opposite direction of the relationship.

(ii) US dollar exchange rate and crude oil price

The relationship between crude oil and the dollar differs from that of gold to the dollar. The price of gold is affected by the dollar exchange rate. The price of crude oil and the price of the dollar reflect an interactive relationship. As crude oil prices rise, the world economy will be affected, including the United States, the world's largest consumer of crude oil. The upward pressure on the price of crude oil will put downward pressure on the dollar, and the immediate consequence of the dollar's depreciation is the rise in dollar-denominated crude prices. Of course, the decline in oil prices, in turn, is a good sign for the economy, and confidence in the US economy will push up the dollar, leading to a further downward adjustment in oil prices. According to experts, the correlation coefficient between crude oil price and US dollar exchange rate is-0.7. In other words, high oil prices often come at the same time as weaker dollars. Therefore, the trend of the dollar and the original oil price should be the opposite direction of the relationship

(iii) Gold and crude oil prices

Gold is a hedge against inflation, and rising oil prices mean inflation will follow, and the economic uncertainty is growing. At this time, the role of gold hedging will be favored by people. There is a positive correlation between gold and crude oil, and the rise in crude prices is indicative of a rise in gold prices as well as a drop in the price of crude to herald a fall in gold prices. In the long run, the trend of gold and crude oil fluctuation is basically consistent, but the size is different, in general, the gold price is positively correlated with the crude oil price.