Gold continued to fall hedge function is weakened?

The price of gold from the historical point of view, the role of hedge against price movements play a decisive role. For example, the United States in 2007 at the outbreak of the debt crisis in the world economy is pessimistic about the economic outlook and expected inflation, gold push all the way up, and in March this year, 1,000 dollars, the reason is that gold hedge function . However, since mid-September Lehman Brothers has been declared bankrupt, the world's financial markets in turmoil, the financial system gradually exposed to the risk, affected the prospects for the world economy has fallen into serious pessimistic expectations, gold prices should rise sharply However, the continuing fall of prices of gold have to let the market have questioned the function of the hedge. At this stage in our understanding of the function of the gold hedge "weaken"? First of all, the market liquidity directly determine the short-term price movements. At this stage, all countries in the world financial crisis has begun to infiltrate into the real economy, the real economy of production, supply, sales are subject to varying degrees of impact, the most serious problem is that the market's liquidity crunch problem. As the economy of a large number of the lack of cash flow, capital requirements were in the hands of persons who may be able to start liquidating the assets of cash, various types of commodity markets significantly reduce the flow of funds, from which all the major commodity fund a substantial reduction in commodity futures positions in the trend can be seen , And the gold in the flow of funds shortage has also failed to "survive", which directly determines short-term gold prices fell. On the other hand, due to tightening market liquidity, cash flow increased by the desire of the international monetary --- U.S. demand, the market for more cash to strengthen the dollar preference, which promote the U.S. economy in the United States in a strong Aisheng Rising dollar last week, the index is all in the top of the 80 first-line operation, the gold market for investors, no doubt leading to higher stress, gold prices also fell inevitable. Second, oil and other commodity markets into bear market in the world of inflation for the time being to ease the crisis. As the gold to guard against inflation is an important tool when other commodity prices big market, it will to some extent to reflect the world economic system of the state of inflation, which caused investors to the gold market psychology changes, the rise in gold prices Short-term fluctuations. U.S. sub-debt crisis has been transmitted to the real economy level, demand for the real economy by inhibiting the production of various commodities market has been down the impact of commodity market into a bear market phase is a foregone conclusion. With crude oil, for example, the price of crude oil since mid-July high of decline since the unilateral all the way down, in September, October is the rapid decline last week, easily fall below 65 U.S. dollars / barrel support, and in mid-July high of history Bit compared to the price of crude oil fell by half. It is for all types of commodities market crash, the risk of inflation in the world economy has been temporarily relieved of gold to resist the attraction of inflation dropped its guard against inflation risks function has been difficult to play, the prices become inevitable. This shows that in the meeting against the backdrop of deepening debt crisis, the market's shortage of cash flow directly determines the price of gold fell short of the market, and various types of commodity markets fell sharply in the world economy makes the risk of inflation has been temporarily relieved of gold to guard against inflation risks Function is difficult to play, this is the recent collapse of the root causes of gold. In the short term, the situation is still difficult to be improved gold price movements should not be too optimistic.