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The dollar is getting less and less valuable. It’s time for gold to show its charm.
According to data released by the US Bureau of Labor Statistics on Tuesday (March 12), the US consumer price index (CPI-U) rose 1.52% year-on-year, far less than the average of 3.76% since the end of the Second World War, but A 10-year moving average above 1.58%.
The chart below shows US monthly inflation data from 1872 to the present. The first 70 years of data oscillated between the extremes of inflation and deflation.
The chart below shows the impact of inflation on the purchasing power of the US dollar for more than 140 years, from which it can be seen that the dollar has depreciated sharply.
Gold has long been seen as a tool to hedge inflation and the depreciation of legal tenders. Gold has performed strongly so far this year. At the same time, global central banks are hoarding gold in record amounts, which is a big boost to the rise in gold prices.
In 2018, the financial market was a year of unresolved. For the first time in 117 years, 93% of assets fell at the end of the calendar year, and the dollar performed better than global stocks and commodities. The last time the US dollar outperformed the rest of the world in asset classes was in 1969, when the dollar was decoupled from gold not long ago.
In fact, David Moadel said, no one expects this year to be the same as last year, especially in the first quarter when stocks and bonds are performing well. To say anything, the dollar is expected to resume its typical long-term downgrade model. In the past half century, the purchasing power of the dollar has steadily declined. Governments and central banks around the world are very aware of this, and in response, they have been buying the ultimate "anti-dollar" asset - gold.
In a report that Huili Futures said that in the context of the global economic slowdown in 2019, the attractiveness of gold will be at a glance.
According to Jeffrey Halley, senior market analyst at OANDA, gold prices are expected to rise in the coming months; gold will be supported as the world economy continues to slow and uncertainty increases.
Obviously, the whole world is turning to gold, and cautious investors may consider doing the same thing.
Editor in charge: Lu Shan RF10057
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