Gold jewelry prices drop below 1,300 yuan per gram! Will gold prices rebound? Latest forecast →

“Gold prices dropped significantly a few days ago, but they have stabilized today. Now is a good time to buy.” On March 24, a sales staff member at Shengsheng Gate Store in Zhengzhou Erqi Commercial Circle told reporters that although the price of this brand’s gold jewelry was 1,350 yuan per gram that day, the store was offering discounts, bringing the effective price down to about 1,280 yuan per gram.

A month ago, Shengsheng brand gold jewelry was priced at around 1,590 yuan per gram, representing a nearly 15% decline over the past month.

The price fluctuations of brand gold jewelry closely follow international gold price trends. On March 24, the London Gold spot price was as low as approximately $4,300 per ounce, with the previous day’s low reaching $4,098.25 per ounce. Although prices slightly rebounded, as of March 24, the London Gold spot price had only increased about 2% year-to-date, with recent sharp declines nearly erasing the year’s gains.

In mid to late March, global financial markets experienced widespread declines, including stock markets, commodities (excluding energy and chemicals), and U.S. Treasuries. As a safe-haven asset, gold was no exception. By March 24, the April COMEX gold futures and London Gold spot prices had both fallen over 17%, while COMEX silver futures and London silver spot prices had dropped around 28%. Meanwhile, previously strong gains in base metals also saw significant adjustments, with LME copper prices falling over 9% in three months.

Regarding the recent overall decline in precious metals and base metals from high levels, Cheng Xiaoyong, Deputy General Manager of Guangzhou Gold Control Futures Research Center, explained that there are multiple reasons:

First, the Middle East conflict has lasted longer than expected, shifting market logic from inflation driven by oil supply disruptions to concerns about a global economic recession. Using the two oil crises as catalysts, the 1970s saw major economies worldwide enter stagflation, characterized by soaring inflation, declining consumer spending, shrinking industrial output, and slowed economic growth. IMF research shows that a 10% increase in energy prices sustained for a year can raise global inflation by 40 basis points and slow economic growth by 0.1%–0.2%.

At the same time, high oil prices have led markets to expect that the Federal Reserve will pause its easing monetary policy or even shift to tightening next year. The March Fed meeting, as expected, paused rate cuts, and the dot plot released afterward indicated only one 25 basis point rate cut in 2026, with one official even projecting a rate hike next year. For most assets, especially precious and base metals, rising real interest rates increase holding costs. As of March 23, the 10-year TIPS yield, which measures real dollar interest rates, broke above 2% for the first time since July 21, 2025.

Additionally, markets may sell off some assets to ensure liquidity. Concerns over inflation resurgence in developed economies and the Fed’s pause on rate cuts have tightened dollar liquidity and triggered a broad market decline, causing private credit markets to face crises. Investors continue to sell assets like stocks and gold to raise cash and reduce leverage.

Cheng Xiaoyong also pointed out that high oil prices raise another concern: central banks may sell some gold due to inflation and import payment pressures caused by high oil prices. For base metals like copper, the trading logic differs slightly: demand shocks for new energy materials like copper and lithium may occur first, followed by supply issues. The Middle East conflict could impact China’s photovoltaic exports, and the global economy’s inflationary pressures may negatively affect demand. Silver’s sharp correction follows similar logic—demand shocks in photovoltaics. However, since the Gulf region is a major electrolytic aluminum producer accounting for about 7% of global output, aluminum prices tend to react to supply shocks first.

Looking ahead, Cheng Xiaoyong believes that the duration of the Middle East conflict remains a key factor influencing the trends of base and precious metals. Although the conflict has lasted longer than expected, both Israel, the U.S., and Iran face multiple pressures, making a resolution increasingly feasible. However, the recovery of oil supply will take time, and the market’s recession-driven trading logic may weaken, shifting focus back to AI and other tech-driven, de-dollarized, and supply-constrained narratives. Base and precious metals are expected to gradually stabilize, with energy and chemical prices slowing or even sharply falling. In terms of trading strategies, extreme market volatility poses risks for both long and short positions; risk hedging should be prioritized, and heavy bets on one side are not advisable.

Huang Jiaqí, a precious metals analyst at Zhuochuang Information, believes that gold’s safe-haven properties and role as an asset buffer still exist, but repeated price fluctuations have somewhat weakened market confidence. The macro news remains uncertain, and future trends will depend on several factors related to Federal Reserve monetary policy: whether the Middle East situation continues to push up energy costs, whether the tariffs previously imposed by Trump need to be refunded, whether the new tariff framework can be implemented, and how U.S. non-farm payrolls and March CPI data influence rate cut expectations. Investors are advised to consider their risk tolerance, manage positions prudently, and invest cautiously.

“Currently, the market generally believes that precious metals are in a ‘short-term pressure, long-term optimism’ pattern,” said Huang Ting, a precious metals analyst at Shanghai Steel Union Lead and Zinc Information. In the short term, before the Fed’s monetary policy shifts and geopolitical uncertainties clear up, precious metal prices may continue to fluctuate or remain under pressure. The market needs time to digest the impact of hawkish policies and wait for new stabilization signals. In the medium to long term, the foundation supporting a gold bull market remains intact. Factors such as ongoing central bank gold purchases, de-dollarization trends, and long-term concerns about the dollar’s credit still exist. Many institutions believe that the current deep correction is a normal market adjustment, and once market sentiment stabilizes, gold prices are expected to resume their upward trend.