Spot Gold Prices Break Below $4500, Creating Largest Weekly Decline in 43 Years

Spot gold prices fell below $4,500, marking the largest weekly decline in 43 years.

Data from Wind shows that on March 20, the rebound in spot gold (London Gold) was short-lived, with an intraday V-shaped reversal, ending the day down 3.42% at $4,491.67 per ounce. This week, it plummeted 10.24%, the largest weekly drop since March 4, 1983. Spot silver (London Silver) fell 6.8% to $67.897 per ounce, with a weekly decline of 12.687%.

On March 20, international precious metals futures also mostly declined. COMEX gold futures dropped 2.47% to $4,492.00 per ounce, with an 11.26% decline for the week; COMEX silver futures fell 4.78% to $67.81 per ounce, but still gained 16.64% this week.

As gold prices retreat, domestic gold jewelry brands’ pure gold prices have also fallen sharply. Chow Tai Fook’s official website shows that on March 20, the price of pure gold jewelry was 1,447 yuan per gram, down 56 yuan per gram from the previous day, and a total drop of 104 yuan per gram over the past two days.

Market opinions suggest that diverging expectations for global central bank monetary policies, combined with increased dollar hedging demand due to Middle East geopolitical tensions, have led institutions to turn bullish on the dollar, suppressing precious metals. Additionally, cautious market sentiment has contributed to the weakening of precious metal prices.

According to Xinhua News Agency citing U.S. media reports on the 20th, the U.S. military is dispatching three more ships and about 2,500 Marines to the Middle East. However, after the U.S. stock market closed, Xinhua reported that President Trump posted on social media on the 20th, saying, “We are very close to achieving our goal,” indicating that the U.S. is considering gradually de-escalating military actions against Iran.

Analysts point out that the gold correction reflects a combination of profit-taking and position unwinding, driven by concerns over the easing pace of monetary policy. When gold prices rose above $5,200, heavy buying attracted more investors, making a correction more likely. As prices began to fall, many investors triggered stop-loss orders—automatic sell orders at certain levels—accelerating the sell-off.

Senior analyst at Swiss UBS, said that rising oil prices boost demand for the dollar. Given the current Middle East situation and oil prices being a key variable, global investors prefer to go long on the dollar or hedge with it rather than switch to gold.

Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals, stated that while war provides some safe-haven support, it is only a secondary factor. The Federal Reserve’s outlook to keep interest rates unchanged until 2027 is a negative for gold.

However, the CIO office of UBS Wealth Management, in its institutional outlook released on March 20, pointed out that geopolitical uncertainties, continuous reserve accumulation by multiple central banks, the U.S.’s low real interest rates, and investor demand for safe-haven assets will continue to support gold prices. It is expected that gold could reach new highs this year. Looking ahead to 2026, the overall outlook for commodities remains optimistic. Structural trends such as supply-demand imbalances, energy transition, and global AI infrastructure development will drive strong returns in commodities. Investors are advised to allocate a single-digit percentage of their diversified portfolios to commodities. Specifically, moderate overweighting in energy is suggested, as shipping disruptions could temporarily push prices higher; similarly, overweighting agricultural products is recommended, as high fossil fuel prices may increase biofuel demand, and rising fertilizer costs could also push prices up. Gold and other precious metals are also recommended to be above benchmark levels.

Despite recent significant corrections, spot gold prices are still up 4.02% this year; spot silver has shifted from gains to losses, with a year-to-date decline of 5.14%.

— The Paper

Editor: Wan Yun

Chief Editor: Huang Xiaomin

Review: Guo Chunyan