【Gold Price Trend】Gold Price Softens After Nine Consecutive Declines; Hong Kong Per Tael Gold Price Falls Below 40,000 Yuan

After nine consecutive declines, gold prices fluctuated and remained weak on Tuesday, still not stopping the decline. The market is weighing the decision of U.S. President Trump to delay strikes on Iran’s energy infrastructure. Spot gold briefly reached $4,448 in early trading, recovering some of Monday’s losses, but latest prices fell back below $4,400, at $4,343, down 1.4%.

The Middle East conflict has pushed energy prices higher and increased inflation and interest rate hike risks, leading to nine straight days of decline in gold prices, the longest streak since 2023.

According to data from CMBC, at 9:30 a.m. Hong Kong time on Tuesday (24th), the bank’s 999.9 gold price closed at HKD 39,600 per tael, down HKD 400 from the previous day, breaking below the HKD 40,000 level, and down HKD 10,400 or 20.8% from the high at the end of January when it was HKD 50,000.

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Trump announced on Monday that he has instructed the U.S. Department of War to suspend all military strikes on Iran’s power plants and energy infrastructure for five days, citing successful negotiations with Iran over the past two days, which boosted U.S. stocks, and caused U.S. bond yields and the dollar to fall. However, Tehran denied any negotiations with the U.S.

Amid the “Rashomon” controversy, the outcome of any negotiations and whether ships can pass through the Strait of Hormuz in the future remain uncertain. Additionally, rebuilding damaged energy infrastructure will take time, meaning inflation threats persist. Market expectations of interest rate hikes by central banks are also unfavorable for gold prices.

As for the decline in gold prices, it can also be partly attributed to investors “wanting cash rather than gold,” selling relatively liquid and profitable gold positions.

Experiencing four to six weeks of downward pressure is not uncommon

Suki Cooper, Head of Global Commodities Research at Standard Chartered, said that gold’s correction is more pronounced than usual, indicating that after a very sluggish period, it is not unusual for gold to face four to six weeks of downward pressure, as gold has proven to be a liquid asset when needed.

Peter Kinsella, Global Head of FX Strategy at Union Bancaire Privée (UBP SA), said that during major crises like this, investors often sell off heavily weighted and well-performing assets to raise funds to meet margin calls on underperforming assets (whether stocks, bonds, or others). He noted that gold’s performance during the 2022 and 2008 global financial crises was similar, stating, “Short-term price fluctuations depend entirely on position allocation,” and added that long-term drivers have not changed.

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