Yesterday GOLD price close at RM 158.88. It seem like GOLD pricing has been fallen in recent week. But it is still consider as bullish GOLD pricing that yet to head downward trend. I believe that GOLD price might be hanging at this price for certain time frame, key reason would be a very low interest rate environment and there are still have demanding of buying gold especially from Asia market which i believe from India & China.
Today i and my friends has studied and try to figure out how the gold price react accordingly to the market supply/demand. I'm not sure whether it is correct or not, but i would like to share it out.
Phase 1 (Positive):
Crude oil price ↓ => Export > Import + Economy ↑ => Company business ↑ + Unemployment Rate ↓ => MFC ↑ + Consumer expenses ↑ => Price for Consumer goods ↑ + Demand > Supply => Inflation ↑ => GDP ↑ + Debt ↓ + Gold price ↑ => Solution: Push Interest ↑ so that less money flow in market.
Phase 2 (Negative):
Crude oil price ↑ (loss stability) => Export < Import + Economy ↓ => Company business ↓ + Unemployment Rate ↑ => MFC ↓ + Consumer expenses ↓ => Price for Consumer goods ↓ + Demand < Supply => Inflation ↓ => GDP ↓ + Debt ↑ + Gold price ↓
Solution: Push Interest ↓ to encourage citizen buy & sales + Stimulate Export activities + reduce debt by launch QE => Buy more bond + currency ↓ => Inflation ↑ => Gold demand ↑ => Gold price ↑
It is not professional formula. It is the simplify version that we're trying to link up the environment factors that might influence to gold price. When will the bearish of gold trend? Maybe you already get the formula with above assumption.