Source: Cailian
On October 21, the current gold fell by 5.4%, making it the biggest drop since August 2020.
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Beijing News Shell Finance (Reporter Jiang Fan) On the evening of October 21, spot gold continued to fall, with gold falling below US$4200/ounce, a drop of as much as 3.8%.
Recently, the price of gold is in a stage of high volatility after the recent surge. On October 17, the price of gold once exceeded the historical peak of $4,390/oz. Just as the market was waiting for gold to break through the $4,400 mark, the price of gold dropped on October 21. On the afternoon of October 21, spot gold fell below the US $4,300 mark, and the price of gold dropped rapidly again in the evening.
Zhao Qingming, deputy dean of the Exchange Information Research Institute, said in an interview with Beechle financial reporter that in the two months since the end of August this year, the price of gold has risen by about $ 1,000.
In Zhao Qingming's view, this round of gold price rise is mainly driven by global bullish sentiment. Geopolitics, global central bank gold purchases, and global excess liquidity are the three major factors driving gold's rise. But at present, these three factors have not changed significantly, and geopolitical tensions have shown signs of easing recently.
Qu Rui, deputy director of the research and development department of Dongfang Jincheng, also believes that the current gold market is highly concerned, and market participants are highly sensitive to sudden information such as Trump's tariff policy, sharp fluctuations in the US dollar index, sudden changes in geopolitics, and differences between the Federal Reserve's monetary policy (rhythm and magnitude of interest rate cuts, etc.) and expectations.
"At present, there is no risk of overheating or bubbling in the market, mainly because the core factors supporting the long-term upward trend of gold prices (such as global uncertainty, downward trend of real interest rates, etc.) have not fundamentally changed." Qu Rui believes that if the price of gold rises too fast in the short term, there will be a risk of large fluctuations in gold prices, mainly because the concentration of long funds has increased significantly, and the market congestion is already at a high level.
For ordinary investors, Qu Rui suggested that although they can still invest in gold, they need to look at this round of rapid rise in gold prices rationally, be wary of the risk of high fluctuations, avoid blindly following the trend, and combine their own risk tolerance, asset allocation scale and investment cycle, and rationally plan the proportion of gold assets.
"Investors should also base themselves on long-term logic. At present, the core factors supporting the long-term upward trend of gold prices (such as global uncertainty, downward trend of real interest rates, etc.) have not fundamentally changed. It is recommended to grasp the market rhythm, adopt a bargain-hunting strategy, and gradually build positions when the gold price pulls back to a reasonable range." Qu Rui also suggested that investors should also clarify their investment goals, focus on asset preservation and risk hedging, instead of simply chasing short-term spread returns, and avoid investment risks caused by blindly chasing high prices.
In addition, China's chief researcher, Shanghai Finance and Development Laboratory deputy director Jiang Xiaobo also expects that gold price fluctuations in the high level in 2025 may increase. Chinese people have a long tradition of investing in gold, many people tend to think of gold as an unchanging asset, but the price of gold is not only rising and falling, the investment gold is also at risk. The price of gold is affected by multiple factors, the price fluctuation occurs, the rise and fall is sometimes even larger. Investing finance should be based on their own investment experience, investment ability and risk preferences, make a suitable asset distribution for individuals and families, do not easily pursue the rise and fall.
Editor Chen Li