Relationship between the stock market, dollar exchange rate, original oil price, and gold price

Source: Internet
Author: User

Relationship between the stock market, dollar exchange rate, original oil price, and gold price

There are many factors that affect the stock market, foreign exchange, oil price, and gold price. However, in general, there is a long relationship between them.

I. Stock Market and crude oil prices

If the stock market falls, it is generally regarded as a sign of a poor economic situation. A poor economic situation means a decline in crude oil demand. There are fewer people buying crude oil, and the supply is oversupply, so the oil price will naturally fall. Conversely, if the stock market rises, the oil price will also rise. In this case, the stock market and

Oil prices are positively correlated.

Ii. Stock Market and commodity futures

The stock market is often influenced by speculative factors, which leads to another situation: when the stock market falls, investors will make a lot of money to invest.

The commodity futures market, such as the crude oil market and the gold market, will rise in this case.

Iii. dollar exchange rate and oil price and gold price

Currency is the measure of commodity value. When the value of a commodity increases, the currency is depreciated. If the value of a commodity decreases, the currency is appreciated. As a global currency, the dollar's exchange rate reflects the value of global trade. Currently, major commodity transactions around the world

The price is dominated by USD. The foreign exchange reserves of China and the United States account for about 65%. The dollar exchange rate trend has an important impact on the commodity trading market, the futures market, and the redistribution of national economic interests. Gold, crude oil, and metals are among the most influential factors due to the fluctuation of the US dollar exchange rate.


(1) US dollar exchange rate and gold price

Gold is a currency reserve. Although the dollar actually plays a role in the previous role of gold, gold still has a certain impact on monetary policy and is a means to combat inflation, it is an alternative to the dollar. The primary function of gold in the market is reserve currency and hedging.


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

First, the dollar is recognized as the world's hard currency. The dollar and gold are both international reserve assets, and the strong dollar weakens gold as reserve assets.

And preserve the value of the function.

Second, the us gdp accounts for about 1/4 of the world's GDP, and the total foreign trade is the largest in the world. The world economy is deeply affected.

However, it has a inverse relationship with the world economy.

Third, the world's gold market is generally priced at the dollar. The devaluation of the dollar will inevitably lead to a rise in the price of gold. On the other hand, the dollar-denominated gold is cheaper for holders of other currencies, this will stimulate demand for gold. Therefore, the dollar trend and the price of gold should change in the opposite direction.

(2) US dollar exchange rate and crude oil price

The relationship between crude oil and the US dollar is different from that between gold and the US dollar. The price of gold is affected by the dollar exchange rate. The price of crude oil and the dollar price reflect an interactive relationship. The rise in crude oil prices will affect the world economy, including the United States, the world's largest consumer of crude oil. The upward pressure caused by the rise in crude oil prices will put pressure on the dollar, and the direct consequence of the devaluation of the dollar is that the price of crude oil denominated in the dollar is also increased. Of course, in turn, the decline in oil prices is a good signal for the economy. People have confidence in the U.S. economy and will push up the dollar exchange rate, resulting in further oil price reduction. According to experts' estimates, the correlation coefficient between the crude oil price and the dollar exchange rate is-0.7. That is to say, high oil prices often appear at the same time as the weak dollar. Therefore, the relationship between the dollar trend and the original oil price should be reversed.

(3) price of gold and crude oil

Gold is a value under inflation, and the rise in oil prices means that inflation will follow, and the uncertainty of economic development increases. At this time, the role of gold hedging will be favored by people. There is a positive correlation between gold and crude oil. The rise in crude oil prices indicates that the price of gold will also rise, and the decline in crude oil prices indicates that the price of gold will also fall. In the middle and long term, the fluctuation trend of gold and crude oil is basically the same, but the magnitude is different. In general, the price of gold is positively related to the price of crude oil.

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