Let’s deduce the logic of the economy, and the starting point of the deduction is the epidemic. The epidemic directly affects the real economy. Once there is an epidemic, the entire city will be closed, people cannot move, and the economy cannot move, and the economy will not be able to rise. The severity of the epidemic is highly related to the real economy.
So how to measure whether the real economy is good or bad? We don’t need to look at other indicators. The first indicator is electricity consumption, which can’t fool people. Note that not all electricity consumption, but industrial electricity consumption. Because the electricity consumption is now overestimated, the electricity used in new energy vehicles is not industrial electricity, but commercial consumer electricity. The second indicator is oil. If the economy improves, the first reaction is to rise in oil prices. Because all industries and economies require energy, and oil cannot be bought at home.
There is a person in our class who works in oil futures , and she will thank me every time. She is a oil storage person. When she was in her 20s, I asked her to buy it quickly. The money she earns now is not a decimal. She specializes in oil storage business. This is something that ordinary people can't do. Even if I know that oil prices will rise, I can't do it. Therefore, this rule must be grasped clearly.
The real economy must be good and oil prices must rise. Oil and the real economy are positively related. So, if the real economy is good, what is the relationship between the real economy and gold?
If you can make money in the industry, why should I buy gold? Gold is a safe-haven asset. Gold itself is not an interest-generating asset, but a safe asset. Only when it is difficult to make a reservation for the real economy and you don’t pursue how much money you make will you buy gold. So the entity goes down every day, and gold will go up. There is a gold man in our class who works in Xiamen University. When the gold reaches more than 1,700 yuan, I said, "Save gold quickly and buy it quickly." I judged that gold fell to $1,700 per ounce at the lowest point, which is generally true. He is a gold smelter. When you provide him with such information, making 10% is a lot of money for him.
Through these things, we can know that the real economy must be better, oil prices will rise, once the epidemic breaks out severely, the real economy begins to recover slowly, and we can see that gold starts to rise from 1700.
Dollar Index measures USD Treasury bonds and treats the currency itself as a commodity. Oil futures, gold futures, and the U.S. stock market are commodity markets denominated in currency. Let’s talk about the relationship between these. We need to look at this in the short term when playing stocks and finance. What is the relationship between the
USD index and gold? When I expect the economy of this society to be very bad, what I pursue is the security of assets and the abundance of liquidity. I will buy USD Treasury bonds or buy gold to collect it. People will run in the stock market, so the stock market will plummet. On March 15, 2020, the US stock market fell from more than 26,000 points to more than 18,900 points within two weeks, with four circuit breakers falling and two circuit breakers rising. People ran in the stock market, gold hit a new high of US$2,100, and the US dollar index rose to 105. We see the US dollar and gold rising simultaneously, and the simultaneous rise in the US dollar and gold means that the economy of this society is already very bad. Everyone lost confidence in the prospects, everyone wanted to leave money to save their lives, and gold and the US dollar rose simultaneously. However, in general, the US dollar and gold are in the opposite relationship, because commodities are denominated by the US dollar, the US dollar depreciates and the US dollar appreciates and the commodity declines. We must grasp this rule.
