Gold prices plummet in a "rare event in 43 years"! Domestic gold jewelry prices per gram plunge through market expectations, leaving everyone confused about what's happening, with some joking "did we crash the market by buying too much?"

Gold Rebounds Briefly

Intraday V-Shaped Movement

Down more than 5% from the daily high

Breaks below the key support level of $4,500

As of Friday (March 20) New York close:

• Spot gold drops 3.42%, at $4,491.67 per ounce, down over 10% this week;
• COMEX gold futures fall 2.47%, at $4,492 per ounce, down over 11% this week.

Gold plunges over 10% this week

Reaching a seven-week low

The largest weekly decline since March 1983

Jewelry prices from Chow Sang Sang, Chow Tai Fook, Luk Fook Jewelry, and Lao Miao Gold

Directly fall below 1,400 yuan per gram

Note that in early March,

Gold prices were generally above 1,600 yuan per gram

As a safe-haven asset, gold

Suddenly declined

Netizens are confused: can’t understand

Man “bottom-fishing” 160 grams of gold, stunned:

“Why did the gold price drop as soon as I bought in?”

“When I didn’t buy, everyone around said buying gold was profitable. Why did the price drop right after I bought? Did I really crash the market?” On the evening of March 18, Mr. Zheng, a post-90s investor in Hangzhou, was browsing Middle East news and watching gold prices, unable to stop asking in an investment group.

“Every time I buy, it drops, and the gold price keeps falling. If this continues, when will I break even?” Mr. Zheng started doubting the concept of gold as the “king of safe-havens.”

According to Chaos News, at the end of February, after Israel and the US launched military strikes on Iran, Mr. Zheng, who works at a tech company in Binjiang, Hangzhou, had never bought gold but was tempted to do so.

On March 2, Mr. Zheng bought 100 grams of gold at 1,188 yuan per gram. After buying, the gold price indeed rose temporarily, even breaking through 1,200 yuan per gram the next day.

On March 18, when gold prices again fell below $5,000 per ounce, Mr. Zheng couldn’t resist and “bottom-fished,” purchasing three small 20-gram gold bars at 1,120 yuan per gram, bringing his total gold holdings to 160 grams.

But to his frustration, the gold price fell again after his purchase. Starting around 8 p.m. on the 18th, London spot gold plunged sharply. “I didn’t sleep well all night. When I checked this morning, the purchase price of my gold bars was about 1,080 yuan per gram. Roughly calculating, my 160 grams of gold is now floating at a loss of over 13,000 yuan,” Mr. Zheng sighed. “Just have to hold on.”

Expert Explanation: “Interest Rate Logic” Suppresses “Safe-Haven Logic”

According to Shanghai Securities News, Qu Rui, Senior Deputy Director of the Research and Development Department at Orient Securities, said, “The ‘counterintuitive’ movement of gold prices mainly stems from interest rate logic significantly suppressing safe-haven logic.”

A key background is that during a “super central bank week” when multiple central banks announced rate decisions, the escalation of Middle East tensions pushed oil prices higher. From the Federal Reserve to the Bank of England, policy tone seems to be shifting towards a “hawkish” stance, and global financial markets’ expectations for monetary policy are quickly turning “hawkish.”

Qu Rui explained: Market expectations for rate cuts have cooled significantly, driving U.S. Treasury yields and the dollar index higher. Additionally, recent liquidity tightening caused by U.S. private credit withdrawals has made the dollar both a safe-haven and a yield asset, diverting safe-haven funds. Meanwhile, as a no-interest asset, holding gold becomes less attractive as U.S. Treasury yields rise.

Is now still a good time to buy? Market analysis suggests that in the short term, geopolitical conflicts and the resulting energy price shocks are the main drivers of global “safe-haven trades.” As a result, gold has experienced repeated fluctuations. Moreover, the current performance of gold contradicts previous common perceptions because the market’s trading logic has fundamentally shifted from “safe-haven trading” to “inflation-tightening trading.” However, some institutions believe that, in the long term, gold still has structural value.

Will investors take advantage of this price dip to buy gold?

Let’s discuss in the comments.