Sharp Plunge! Gold Breaks Below $4,700, Some Buyers Left Stunned: "It Drops Right After I Buy, Lost Big..."

On the evening of March 18 Beijing time, spot gold experienced a sharp plunge during trading. By the close of the day, London spot gold prices fell more than 3%, hitting a new low since February 6.

On March 19, spot gold continued its decline, breaking below the $4,800 and $4,700 levels. As of the time of writing, spot gold dropped to $4,691.67 per ounce.

Spot silver fell 6.83% intraday, trading at $70.227 per ounce.

Affected by the sharp drop in international gold prices, domestic gold jewelry prices also saw significant declines today. Chow Sang Sang gold jewelry is priced at 1,492 RMB per gram, down 55 RMB for the day. Chow Tai Fook gold jewelry is priced at 1,503 RMB per gram, down 48 RMB. Lao Feng Xiang is priced at 1,498 RMB per gram, down 42 RMB.

New investors joke about buying and immediately losing money

“I didn’t buy, and everyone around me said I made money with gold. But as soon as I bought in, the price dropped?” On the evening of March 18, Mr. Zheng, a post-90s investor from Hangzhou, was watching the Middle East situation and monitoring gold prices, unable to resist asking in an investment group.

Mr. Zheng works at a tech company in Binjiang, Hangzhou, and has never bought gold before. In late February, after Israel and the US launched military strikes on Iran, he thought, “Gold is supposed to be a safe haven, and with the tense situation, it should go up.”

On March 2, Mr. Zheng bought 100 grams of gold bars from a jewelry company for 1,188 RMB per gram. “I thought that number was pretty lucky at the time,” he said with a wry smile.

Photo provided by the interviewee

After buying, gold prices did rise temporarily, but not for long. Starting March 4, prices turned downward, entering a weak consolidation phase, and never returned to his purchase level.

On March 18, when he saw gold prices drop below $5,000 per ounce again, Mr. Zheng couldn’t resist trying to “bottom fish.” At noon on the 18th, he bought three small 20-gram gold bars at 1,120 RMB per gram, bringing his total gold holdings to 160 grams.

Photo provided by the interviewee

But what disappointed him was that gold prices fell again after his purchase. Since around 8 p.m. last night, London spot gold prices plunged straight down. “I didn’t sleep well all night. This morning, I checked and saw that the purchase price of my gold bars was about 1,080 RMB per gram. Roughly calculating, the 160 grams I bought already have an unrealized loss of over 13,000 RMB,” Mr. Zheng sighed. “I can only hold on.”

Many investors lament: losing money to the max

In fact, investors like Mr. Zheng are quite common. Since March, international gold prices have been volatile and trending downward. Wind data shows that on March 2, London spot gold once reached a high of $5,419.32 per ounce, but then continued to fluctuate downward. As of 11:14 a.m. on March 19, the price was $4,861.518 per ounce, nearly an 8% decline this month.

This decline has also caused many gold-related investors to complain on social media: “My investment gold bars are a total loss,” “The bank’s savings gold has already lost over 8,000 RMB,” “My gold stocks have lost several months’ worth of wages,” and so on.

Experts analyze why gold prices are falling instead of rising

Many investors are confused about why, as a traditional safe-haven asset, gold is not rising but falling amid this geopolitical conflict.

Zhejiang Merchants Futures Research Center senior macro analyst Zheng Hong told reporters that the ongoing tension in Iran, the blockage of the Strait of Hormuz, and the sharp rise in oil prices have driven up oil markets significantly. Against the backdrop of rising US inflation expectations, market expectations for a rate cut by the Federal Reserve this year have cooled. Since gold does not generate interest, this has weakened its investment appeal and become a key factor in the downward pressure on gold prices.

Editor: Lu Lina