Affected by multiple factors such as investor profit-taking, international gold prices fell sharply by more than 5% on the 21st, the largest single-day decline in five years. On the same day, the international spot gold price fell about 5.3% to US$4,123.85 per ounce, plunging 6.3% intraday, the largest decline in 12 years.

A salesperson at a gold shop in Qianyuan Town, Deqing County, Huzhou City, Zhejiang Province is sorting out gold jewelry. Photo by Ni Lifang (Xinhua News Agency)

One Facebook user posted a video saying: "Before the fall, I ordered 1 kg of gold plates and 15 kg of silver plates, and in one hour I lost at least 50,000 yuan."

Photo source: Dahe Daily video screenshot

On the 22nd, spot gold continued to test downward after the opening, and fell sharply to 8.01% during the session, with a low of US$4,005.01 per ounce. Spot silver once fell to 2.1%, at US$47.529 per ounce.

Why do gold and silver fluctuate frequently?

Bloomberg reports that as investors worry that the recent historic rise in precious metals prices has led to its value being overvalued, gold has suffered the worst sale in years.

Tony Sickamore, market analyst at IG, said the gold market continued to rise significantly in the previous period and was severely overbought.

Bank of America's latest October Global Fund Managers Survey showed that 43% of investors surveyed believe that "long gold" is currently the most crowded transaction, exceeding the 39% of the "long seven U.S. stocks" companies.

Since late August, the international gold price has opened up room for upside after several months of consolidation, rising from around US $3,300 per ounce to more than US $4,000. Geopolitical changes and intensified global economic uncertainty, interest rate cuts by the Federal Reserve, and gold purchases by global central banks are important driving factors for this round of gold strength. At the beginning of this week, the international gold price once rose to $4,381.21 per ounce, a record high. Since the beginning of this year, international gold prices have risen by about 60%.

Some analysts believe that the long-term driving factors that push gold prices to record highs continuously still exist, and it is expected that gold prices will resume rising in the next few months.

Source: Economic Daily WeChat Comprehensive Xinhua Agency, Southern Daily, Daily Economic News, Central Economy and Finance