"Gold Price Plummets" Trends Again! Experts Explain Current Market Movement

For days, the volatile performance of gold has attracted market attention.

On March 18, the spot gold (XAU) price fell below $5,000 per ounce; on March 19, the decline continued, with the intraday low reaching $4,501.50 per ounce, a drop of over 5%. This week, it plummeted more than 10% to a seven-week low, marking the largest weekly decline since March 1983.

In the early hours of March 21, both spot gold and gold futures broke below the $4,500 mark, with weekly declines exceeding 10%, the largest weekly drop in 43 years.

Domestic branded gold jewelry prices

Directly fell below 1,400 yuan/gram

It’s worth noting that in early March,

gold prices were still generally above 1,600 yuan/gram.

On March 21, domestic branded gold jewelry prices continued to decline sharply compared to the previous day. Chow Tai Fook’s official website showed that its 24K gold jewelry was priced at 1,397 yuan/gram, down 50 yuan/gram from the previous day’s 1,447 yuan/gram, breaking below 1,400 yuan/gram. Chow Sang Sang’s 24K gold jewelry was quoted at 1,389 yuan/gram, down 54 yuan/gram from the previous day’s 1,443 yuan/gram. Additionally, well-known brands like Luk Fook Jewelry and Lao Miao Gold saw their gold jewelry prices drop below 1,400 yuan/gram, with significant declines compared to the previous day. Compared to the widespread prices above 1,700 yuan/gram at the end of January this year, gold jewelry prices have fallen by over 300 yuan/gram in less than two months.

On March 21, headlines like “Gold jewelry prices drop sharply again” and “Gold jewelry prices plummeted 32 yuan overnight” trended on social media, with attention continuing to rise.

As gold, a safe-haven asset, suddenly declined, many netizens were confused, saying they couldn’t understand it—has gold price out of control?

Expert explanations:

“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, stated, “The ‘counterintuitive’ movement of gold prices mainly stems from interest rate logic significantly suppressing safe-haven logic.”

An important background is that during a “super central bank week,” when multiple central banks announced interest 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 “hawkishness,” and market expectations for monetary policy paths have quickly turned “hawkish.”

Qu Rui said: “Market expectations for rate cuts have cooled significantly, driving U.S. Treasury yields and the dollar index to strengthen simultaneously. Additionally, recent liquidity tightening caused by U.S. private equity credit withdrawals has made the dollar attractive for both safe-haven and yield reasons, diverting safe-haven funds. Meanwhile, as a non-interest-bearing asset, holding gold incurs opportunity costs that rise with U.S. Treasury yields.”

Is now still a good time to buy in? Market analysis suggests that in the short term, geopolitical conflicts and the resulting energy price shocks are the main drivers of global “safe-haven trading.” As a result, gold has experienced repeated fluctuations. At the same time, gold’s recent performance 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, from a long-term perspective, gold still holds structural value.