🔥Why does gold fall... but the dollar rises back?

Why does gold fall... but the dollar rises back?

During this period of market volatility, many people may begin to notice that when gold falls, dollars tend to rise, which is actually not a coincidence.

But it is the "basic mechanism of global financial markets."

Gold is priced in dollars. Global gold trades in XAUUSD format.

That means... as the dollar hardens, people who use other currencies have to pay more expensive to buy gold.

The result is

• Reduced demand

• Gold prices have a chance to adjust.

High interest. Make gold unattractive.

Gold is a "no-interest" asset.

But during that,

• The central bank raised interest.

• High yield bonds

Instead, investors often choose to hold income-generating assets.

- So the money flows out of the gold.

- Go in dollars and return assets.

A game of "money flowing."

Financial markets are not just about prices.

But capital flow.

• When money flows into USD ➡️ solid dollars

• When silver flows out of gold, ➡️ the price of gold weakens.

That's why we often see gold and dollars running together.

So are there any cases that occur at the same time?: Yes, sir.

In times of severe crisis, for example,

• War

• Economic crisis

Investors may choose to hold both.

- Gold (safe assets)

- and the dollar (the world's main currency).

This makes it possible for both to "adjust up simultaneously" at some stage.

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