In the past week, international gold prices experienced a cliff-like drop.
As of March 21, Beijing time, the spot price of London gold not only fell below the key level of $4,500 per ounce, but also recorded a weekly decline of 10.49%, marking the largest single-week drop since March 1983.
Currently, the conflict in the Middle East is still escalating, raising the question of why gold's safe-haven effect has failed. Wang Jun, chief expert at Greeen Dahu Futures, told First Financial reporters that the short-term macro factors of &#34;global inflation heating up - high interest rates - strong dollar&#34; have overshadowed the traditional safe-haven logic of gold. Coupled with the resonance of capital behavior and technical adjustment demands, this has led to a decline in gold prices instead of an increase.
Traders also told First Financial reporters that from the market trading situation, the trading volume significantly increased during the rapid price decline, indicating fierce competition between bulls and bears, with some funds that entered the market based on safe-haven logic showing signs of stop-loss exits.
According to Wind data statistics, this week, the price of London spot gold turned downward after reaching a high of around $5,040 per ounce on March 14, closing lower for eight consecutive trading days. The main contract for COMEX gold futures closed at $4,592.1 per ounce, with a weekly decline of 9.62%.
The decline in silver prices was even more significant, dropping over 15% during the same period, while palladium and platinum followed the international gold price downward.
In addition to precious metals, global assets were also sold off. The three major U.S. stock indices have fallen for four consecutive weeks, with the S&amp;P 500 setting the longest weekly losing streak since March 2025; the European bond market also experienced a significant decline, with the yield on 10-year UK government bonds rising by 17.7 basis points this week, reaching 5% for the first time since 2008; the yield on 10-year German government bonds hit a new high since 2011, with the two-year German bond yield rising by 23 basis points this week.
On the news front, according to Xinhua News Agency, the United States is formulating a strategic plan to seize Iran's &#34;nuclear reserves.&#34; Additionally, the Iranian military has threatened to carry out devastating strikes against &#34;evil&#34; U.S. and Israeli officials, commanders, and soldiers, stating that they will no longer be &#34;safe&#34; even while vacationing abroad.
Jerry Chen, a senior analyst at GAIN Capital, believes that since the outbreak of geopolitical conflicts in the Middle East, the logic of the financial market has gradually become clear, with safe-haven funds flowing into oil and the dollar. Inflation risks have forced global central banks to end easing policies and even shift to a rate hike cycle, putting pressure on gold and leading to a sell-off in global stock markets.
Furthermore, the macro data released this week further diluted market expectations for interest rate cuts. The U.S. February PPI (Producer Price Index) rose by 3.4% year-on-year (expected 3.0%), marking the largest increase since July 2025; the core PCE (Personal Consumption Expenditures Price Index) expectation was raised to 2.7%.
At the same time, the Federal Reserve released hawkish signals, announcing that it would maintain the federal funds rate target range at 3.50% to 3.75%, marking the second consecutive pause in rate cuts this year. Additionally, the Federal Reserve raised its expectations for PCE inflation, core PCE inflation, and GDP growth for this year and next.
Moreover, the strengthening of both interest rates and the dollar directly suppressed gold prices. The latest yield on 10-year U.S. Treasury bonds rose above 4.25%, and the dollar index stabilized above the 100 mark, further lowering the price of gold denominated in dollars
The recent sharp decline in gold prices has caused many ordinary investors to suffer losses due to misjudging the timing, and Shanghai investor Xiao Wen is one such example.
On the morning of March 19, Xiao Wen saw that the overnight international gold price had dropped to around $4,800, and the quoted price for accumulated gold also fell. She decided to take action. Around 9 a.m., she bought 12 grams of accumulated gold from a certain bank at a transaction price of 1,082.6 yuan/gram, plus a 6 yuan handling fee, bringing her holding cost to about 1,089 yuan/gram. &#34;Recently, the quoted price for accumulated gold has been maintained above 1,100 yuan, and at that time I thought it had dropped so much that it should rebound,&#34; Xiao Wen said.
Around 2 p.m. that afternoon, the international gold price suddenly plummeted. The numbers on the accumulated gold price screen jumped rapidly, heading downward. &#34;I stared at my phone all afternoon, watching the price drop and feeling very desperate.&#34; By the time she finished work around 5 p.m., the quoted price had fallen to about 1,050 yuan/gram, and her account showed a floating loss of about 500 yuan, while the downward trend continued.
In the early hours of March 21, Xiao Wen continued to monitor the market during U.S. stock trading hours. She placed an order at 1,010 yuan, but the price did not reach that level for a long time. Just as she was about to give in to sleep, fearing she would miss the opportunity to add to her position, she hesitated for a moment and bought again at 1,026 yuan. The next morning, she woke up to find that the gold price had dropped to a low of 1,007 yuan.
Another investor caught in this round of declines is Xiao Lin from Hangzhou. When gold prices began to plummet on March 18, Xiao Lin increased his holdings in gold ETFs. In the following two trading days, the net value of the gold ETFs continued to decline along with the gold price, prompting Xiao Lin to make two more purchases in an attempt to lower his cost.
&#34;Every time it drops, I think it's the bottom, but I end up buying in the middle of the decline each time,&#34; Xiao Lin said. Currently, his three positions show a floating loss of over 10%, and there is little money left in his account, forcing him to choose to &#34;lie flat.&#34; According to Wind statistics, as of March 21, the seven gold ETFs linked to the SGE gold 9999 index have seen their scale shrink by over 24 billion yuan this week.
There are many investors like Xiao Wen and Xiao Lin who are &#34;buying more as prices drop&#34; during the decline in gold prices. Industry insiders remind that this &#34;bottom-fishing&#34; mentality can easily lead people to overlook the persistence of trends, and blindly entering the market during a sharp decline often carries significant risks.
The more pressing question in the market now is whether gold prices can rebound.
China Asset Management analyzes that gold, viewed as a safe-haven asset, has been on a downward trend since March because the safe-haven nature of gold is reflected in the collapse of U.S. dollar credit and uncontrolled inflation, rather than risks of liquidity drying up and deflation. The current market is worried about marginal deterioration in liquidity, while the impact of geopolitical conflicts has clearly weakened.
The institution believes that the tight monetary shocks faced by gold are more temporary, and the long-term logic of geopolitical conflicts and central bank gold purchases has not been shaken or reversed. The medium to long-term upward momentum for gold continues, but in the short term, it still needs to wait for risk release.
In the face of market panic, institutions still claim that short-term pain cannot hide the long-term allocation value of gold.
UBS Wealth Management believes that geopolitical uncertainty, continued central bank buying, and safe-haven demand will continue to support gold prices. The recent adjustment in gold prices is consistent with past performances at the beginning of geopolitical crises. As risks persist and real interest rates decline, gold is expected to reach new highs this year.
Luo Zhiheng, chief economist at Guangdong Development Securities, pointed out that the current sharp drop in gold is not a signal of the end of a bull market, but rather a deep correction during an upward trend. In the long term, the normalization of global geopolitical risks, strong gold purchasing demand from non-U.S. central banks, and the risk of the global economy potentially shifting from &#34;expansion&#34; to &#34;stagnation&#34; will provide solid support for gold prices
However, for investors eager to &#34;buy the dip,&#34; institutions generally offer cautious advice. &#34;Technical analysis indicates that gold prices have clearly fallen below the key support level of the 60-day moving average, suggesting that further downside potential may be opened up.&#34; The aforementioned trading personnel advised that, given the ongoing negative factors such as the Federal Reserve's monetary policy and the trend of the US dollar, the short-term downward trend has not yet ended, and ordinary investors should avoid blindly catching falling knives during a downtrend. It is advisable to wait for gold prices to stabilize after fluctuating in the range of $4,400 to $4,600 per ounce before gradually positioning for medium to long-term holdings

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International gold prices have significantly declined over the past week, with the spot price of London gold falling below $4,500 per ounce, marking a weekly drop of 10.49%, the largest single-week decline since 1983. Market analysis indicates that macro factors such as rising global inflation, high interest rates, and a strengthening dollar have affected gold's safe-haven appeal, leading to a cooling of investor sentiment. Meanwhile, prices of silver, palladium, and platinum have also fallen, resulting in a global asset sell-off, with significant declines in both the U.S. stock market and European bond market

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Gold prices fell below the $4,500 mark, with a weekly decline of over 10%, as investor "bottom-fishing" sentiment cooled