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The Irrationality of Abnormal Volatility of Gold Market from the Perspective of Behavioral Finance

Author(s)

Yipeng Wang

Affiliation(s)

Jinan High-tech Zone Experimental Middle School, Jinan, Shandong, China

Abstract

As a new discipline, behavioral finance provides a unique perspective for analyzing the volatility of the gold market. It emphasizes the role of irrationality in investment decisions, reveals the important influence of investors' psychology and behavior on the psychological and behavioral factors of investment decisions on the price of gold, and helps to deeply explore the irrational energy behind the volatility of the gold market. Based on behavioral finance, this paper proposes how to optimize investment decisions and enhance market benefits in view of current gold market volatility. This paper discusses the irrational characteristics of gold market fluctuation from the perspective of behavioral finance. By analyzing investors' psychological deviation, sentiment and market information asymmetry, this paper reveals the irrational behavior mechanism behind gold price fluctuation. The results show that investors' mood swings, overconfidence and herding are the main reasons leading to irrational fluctuations in the gold market.

Keywords

Behavioral Finance; the Gold Market; Irrational; Psychological Bias; Emotion

References

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