At the end of January 2026, the global gold market experienced a wild roller coaster ride. In the early hours of January 30th, the price of gold in London soared to a historic peak of $5598.75 per ounce, only to swiftly enter a “waterfall mode” shortly after. On January 31st, gold in London plunged in a single day, marking the largest daily drop in nearly 40 years. Some individuals who had gained 55,000 yuan the previous day found themselves losing 40,000 yuan the next. In Shuibei Market in Shenzhen, the price of gold bars plummeted from 1200 yuan per gram to 1126.5 yuan per gram, with some merchants refusing to sell their stocks.
Recently, the soaring precious metals market has witnessed a “crash-style” freefall. According to reports from the Daily Economic News, on January 31st, visits to the core gold and jewelry trading hub of Shuibei Market in Shenzhen revealed the market’s trading situation following the drastic drop in gold prices. In response to the recent decline in gold prices, one knowledgeable individual remarked: “I will definitely hold onto my stock and not sell it. The current situation is not favorable.” Regarding the reluctance of traders to sell their stock, one merchant explained that it was partly due to the sharp decline in gold prices and also because the Chinese New Year was approaching, causing traders to be overwhelmed with inventory that they could not manage.
A merchant in Shuibei Market who specializes in selling gold bars revealed that the price of gold bars had plunged from 1200 yuan per gram to 1126.5 yuan per gram. With an additional 15 yuan for labor costs, the final price was around 1141.5 yuan. Compared to the price two days prior, the drop exceeded 50 yuan. When asked whether the price would change on January 31st, the merchant stated that it would remain stable until the following Monday since it was the weekend.
Amid the decline in gold prices, some merchants in Shuibei Market explained that they currently faced a shortage of gold bars since “the stock is not easy to come by.”
Merchant Zhang Li (pseudonym) expressed that with the recent sharp drop in gold prices, selling gold bars to customers required placing an order with traders in advance to set the price and minimize losses.
“I have to place an order for pricing as soon as you make the purchase,” the above-mentioned merchant shared. “In fact, traders have not been selling much stock in these past two days since January 30th.”
“There are mainly two reasons behind this. Firstly, with the recent sharp drop in gold prices, traders are reluctant to take risks as they would incur losses at high prices. Secondly, with the approaching Chinese New Year, traders have taken on too much inventory that they cannot handle on their own.” Merchant Zhang Li (pseudonym) elaborated that if a trader sets a price of 1200 yuan per gram at the Shanghai Gold Exchange, but the price of gold drops to 1195 yuan per gram, the trader will lose 5 yuan per gram.
“Those who frequently speculate on market trends tend to close down quickly. Many merchants are currently facing problems.” Zhang Li remarked.
“Silver is selling at a fixed price, and gold is hardly being sold anymore.” An informed individual in the trade shared that traders incur costs as well. In the face of such a sharp market decline, traders are reluctant to sell their stock and are unable to make up for losses. “It’s time to take a break these past few days.”
“We won’t sell when the price has dropped like this.” A gold trader commented.
At 3 a.m. on January 31st, discussions were ongoing in many gold trading chat groups. Some people complained that they were making profits on January 29th, only to suffer losses the next day.
Some investors expressed regrets within the groups, stating “I just jumped on the bandwagon two days ago” and “I earned 8,000 yuan from last year till now, but this time I lost it all at once.” Many members in the group were discussing whether gold prices would continue to fall. Some were planning to buy at the dip, while others were considering timing their exit strategies.
Furthermore, many investors who purchased bank savings gold were also affected. “I lost 80,000 yuan in a day.” One investor explained that after buying a wave of gold on New Year’s Day and not making much profit when selling some of it, they invested more. Screenshots of their gold account showed they currently hold 675 grams of gold. “I was thinking of making it to 60,000 yuan when my profit reached 55,000 yuan yesterday. However, after a big drop later that day, my profit dropped to 30,000 yuan, and today, I not only lost it all but also lost 40,000 yuan.”
The market is now watching closely to see what the future trend will be after gold has experienced its largest fluctuation in history.