International gold price plummet triggers chain reaction, with many chain gold stores in Mainland China swiftly lowering the listed prices of gold jewelry, with some brands reducing by over 60 yuan per gram. Gold investors on social media in China are expressing sorrow and concern.
Since the beginning of this year, driven by the hedging demand of central banks around the world and concerns about the U.S. fiscal situation, the prices of precious metals have risen significantly. The price of gold has already increased by about 60% this year, but after reaching a historic high of $4,381.52 per ounce on Monday (20th), gold suddenly plummeted on Tuesday. As of 1:45 AM Eastern Time in the US, spot gold fell by 5.5% to a one-week low of $4,115.26 per ounce, marking the largest single-day drop in five years.
Affected by the international gold price decline, domestic chain gold stores in Mainland China have adjusted the listed prices of gold jewelry and gold bars overnight, with reductions ranging from 50 to 83 yuan. Among them, Asia Gold, Laofengxiang, quoted gold jewelry at 1,211 yuan per gram, down by 83 yuan from the previous day; Laofengxiang quoted 1,229 yuan per gram, down by 61 yuan; Chows, Lukfook, Chow Tai Fook, and Zhou Dasheng quoted 1,235 yuan per gram, down by 57 yuan from the previous day.
A field visit by a journalist from “Economic Herald” to Shuibei Market in Shenzhen revealed that the price of gold in the market is around 960 yuan per gram. A merchant told the journalist that the gold price yesterday morning was still 1,006 yuan per gram, but it changed three times in a day, with a nearly 50 yuan drop in a single day, the largest drop she has seen in her career.
According to a report by Netease, on the morning of the 22nd, gold investors on social media expressed their distress,
“Yesterday I made a profit of 40,000, today I lost 40,000 directly.”
“I couldn’t bring down the ‘high’ price of the past few days hanging over me from the tree,” one user commented in frustration.
“In the morning, I thought I was seeing things, I had to rub my eyes several times to confirm,” said Ms. Zhou, an investor from Chengdu, with a tone of helplessness. She admitted that her position was profitable the day before, but overnight she lost an amount equivalent to the price of an iPhone 17. “The drop in gold price is fiercer than Chengdu’s recent drop in temperature; I will never blindly chase highs again.”
“A few days ago, seeing the gold price rise every day, I thought I could make a profit, so I put most of my savings into it, and now I can’t bring it down from the tree,” lamented Mr. Li, an investor from Hangzhou. He admitted that he blindly followed the trend without thinking when he saw the record-breaking gold price and some around him making short-term profits. However, overnight his position went from profit to loss, “Now I see all green in the market app, I have no idea if I should sell or wait.”
Mr. Xiao Chen from Guangdong found himself in a deeper crisis; he borrowed 100,000 yuan from a friend and used 50,000 yuan from his credit card because he heard that gold could bring a stable income. He planned to repay the amount once he made a profit, but now he’s trapped. He revealed that he not only has to face the daily rising loan interest but also the pressure of potential loss of the principal, “I can’t sleep every day, watching the market gradually go down, feeling very confused, not knowing how to end this.”
Market analyst Fawad Razaqzada from toneX wrote in a report, “There is a massive sell-off in the precious metals sector. Given the rapid price increase earlier, this day was bound to come.” Razaqzada believes that suggesting “a broader bull market trend has ended is premature. Many investors missed the previous large rally, and they may quickly buy on the dips, which should curb the selling.”
Peter Boockvar, Chief Investment Officer of OnePoint BFG Wealth Partners, believes that after significant increases in gold and other precious metals this year, they “might need to take a break in the short term.” He advises investors to be prepared to add positions when prices drop but acknowledges that gold prices “may already be ready to enter a digesting phase.”