International gold prices hit a new low in more than two months, with A-share gold sector experiencing a collective sharp decline

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International gold prices continue to decline. On March 23, London spot gold prices fell nearly 4% to $4,319.66 per ounce. As of press time, the price dropped 2.33% to $4,392 per ounce, hitting a new low since January 2.

On the same day, the A-share gold concept sector fell over 3%. Among individual stocks, Chifeng Gold hit the limit down, Shan Jin International dropped over 8%, China Gold, Shengtun Mining, and Sichuan Gold fell over 6%, Shenda Resources, Shandong Gold, and Zijin Mining declined over 5%.

Specifically, Chifeng Gold opened with a limit-down, which may be related to Zijin Mining’s acquisition, in addition to sector correction factors. On March 23, Chifeng Gold and Zijin Mining announced that Zijin Mining plans to acquire control of Chifeng Gold for a total transaction value of 18.258 billion yuan.

Influenced by the decline in international gold prices, domestic gold jewelry prices also fell on March 23. Among them, Chow Tai Fook’s pure gold jewelry price was 1375 yuan per gram, down 22 yuan from the previous day; Chow Sang Sang’s pure gold jewelry was 1367 yuan per gram, down 22 yuan; Lao Miao Gold’s pure gold jewelry was 1363 yuan per gram, down 50 yuan.

International gold prices experienced a sharp decline over the past week. On March 21, London spot gold prices broke below the key level of $4,500 per ounce, falling for eight consecutive trading days, with a weekly decline of 10.49%, the largest weekly drop since March 1983.

Amid ongoing tensions in Middle Eastern geopolitics, gold prices, as one of the most important safe-haven assets, have fallen rather than risen, surprising many investors. Analysts point out that the recent plunge in gold prices is a natural result of rising inflation expectations, profit-taking, and a restructuring of safe-haven logic.

Nankai University finance professor Tian Lihui recently told media that gold price movements are driven by three variables: real interest rates, US dollar credit, and risk sentiment. Excessive pricing based on any single logic will ultimately revert to equilibrium. The surface reason for the recent sharp decline is the delayed expectation of Fed rate cuts, forcing the market to reassess the path of real interest rates; deeper down, it reflects a fundamental shift in gold pricing logic—geopolitical safe-haven giving way to inflation trading logic. Rising oil prices boost inflation expectations, causing funds to flow from interest-free assets like gold into dollars and US Treasuries, ultimately triggering a stampede of sell-offs.

Ruo Zhi Heng, chief economist at Yuekai Securities, believes that the conflict between the US and Iran has caused a significant drop in global stock markets, with high-leverage positions facing enormous forced liquidation pressure. Investors need to raise funds quickly to meet margin calls. In this context, gold, which had accumulated high unrealized gains earlier, became the first choice for liquidation. This passive selling to replenish stock market margins caused gold to also come under pressure during risk asset declines, showing a short-term positive correlation between the two.

Wind data shows that spot gold prices once surged to a high of $5,598.75 per ounce on January 29 of this year. However, since early March, spot gold prices have generally trended downward.

Nevertheless, many institutions remain bullish on gold. Morgan Stanley believes that if geopolitical tensions persist, gold prices could reach $5,700 per ounce in the second half of this year. Huachuang Securities suggests that gold has entered a super cycle, with central bank gold purchases continuously strengthening, and safe-haven and investment demand potentially lasting long-term.

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Editor: Zhu Hennan