As the only non credit currency in the world, gold is different from paper currency, deposit and other monetary forms. It has a very high value, unlike other currencies, which are only the representatives of value, and its own value is very small. In extreme cases, money will equal paper, but gold will never lose its value as a precious metal. Therefore, it can be said that gold can be regarded as the representative of eternal value. The most obvious manifestation of this significance is the investment value of gold in the era of inflation – paper money and so on will depreciate due to inflation, but gold will not. Take the suit of the famous tailor street in England as an example. For hundreds of years, the price has been five or six ounces of gold, which is a proof that the purchasing power of gold has never changed. Hundreds of years ago, you could buy a suit for tens of pounds, but now you can only buy a sleeve. Therefore, in the era of currency liquidity and inflation, gold will be favored by investors because of its anti inflation characteristics.
What has an important influence on gold price is the real interest rate after deducting inflation. The real interest rate after deducting inflation is the opportunity cost of holding gold. When the real interest rate is negative, people are more willing to hold gold.