Recently, the collapse of gold prices has been a hot topic, especially on June 28, 2024, when the gold price reached an unexpected low. However, this low did not attract more buyers, but rather made the market more deserted. What's going on here? What are the untold stories behind the plunge in gold prices?
The event passed
June 28, 2024, a normal weekend, was supposed to be a time for the market to rest, but for those who follow the international gold price, the day was unusually busy. Early in the morning, the international spot gold market reported a shocking figure - only $2,321.65 per ounce. This price, compared with the market situation a few days ago, can be said to be a big dive.
It all seems to have started with a sudden market dynamic. According to insiders, some large gold reserve countries suddenly announced that they would increase market supply, and the news immediately triggered panic selling in the market. As the supply surged, the price of gold naturally became unsustainable and began to fall in succession.
Typically, however, the decline in the gold price should attract a large number of buyers, especially those waiting to "pick up the bargain". But this time it doesn't seem to be the case. Instead of warming up with the decline in gold prices, buying sentiment in the market has been unusually cold. Despite the low price of gold, the recycling price of gold has also fallen – 547 yuan/gram for gold and 546 yuan/gram for gold bars, but there has been no significant increase in buying behavior in the market.
Behind this phenomenon lies the problem of consumer confidence. As economic uncertainty increases, many potential buyers are starting to worry about a possible further decline in the gold price in the future, or greater market volatility, so they choose to wait and see rather than buy in the market.
In addition, the domestic gold price showed a similar trend. The main price of Shanghai gold is 551.76 yuan / gram, which has formed a certain gap with the international gold price, but this gap has not triggered a large number of purchases in the domestic market. Domestic consumers are more sensitive to gold prices than international markets, and they are more inclined to invest when prices are stable or on an upward trend.
In this environment, even well-known domestic gold stores, such as Chow Tai Fook and Lao Fengxiang, have tried to attract customers by raising recycling prices when gold prices are low, but the results do not seem to be ideal. For example, the price of Chow Tai Fook's gold is as high as 728 yuan per gram, which is significantly higher than the market price, which makes consumers more hesitant.
The downturn across the market is not just in the gold sector, but also in the silver and palladium markets. The spot silver price was 29.53 US dollars / ounce, while the main price of Shanghai silver was 7835 yuan / kg, and the price difference between the two did not arouse the market's enthusiasm for buying. The palladium market was similarly depressed, with the main contract trading at $918.00 per ounce despite spot palladium trading at US$992.50 per ounce, signalling pessimism in market expectations.
In this market environment, the pricing strategies of banks and gold stores are also particularly cautious. Major banks, such as China Construction Bank, Bank of China, Industrial and Commercial Bank of China, and Agricultural Bank of China, are carefully adjusting their bullion prices in an attempt to maintain customers without suffering losses in the price war. But regardless of the price adjustment, the market reaction has been nowhere near as active as expected.
As the days go by, there is more and more discussion about gold in the market, but there are still very few buyers who are actually willing to place an order. This phenomenon has baffled many market analysts and investors. On the one hand, the downturn in the gold price should have been a good time to buy, but on the other hand, the cold reaction of the market has forced people to rethink their investment strategies.
On the day of the collapse in gold prices, the contradictions and complexities displayed in the market reflect the hesitation and unease of investors in the current economic environment. Over time, the question remains open as to whether this trough in the gold price will usher in a return of buyers, or whether it will remain sluggish.
With the unusual volatility of the gold price, the discussion about this phenomenon on the Internet has also become hot. Different voices have converged on social media and major financial forums to form a variety of opinions and interpretations. Below, let's take a look at what netizens have to say:
Xiao Li said: "The current gold price is really confusing, it is obviously so low, but none of the friends around me jumped in to buy the bottom, everyone is waiting and watching!" ”
Cuong commented: "In this case, I think there is still a lack of confidence in the market, and everyone is afraid that this is just a trap, and the price of gold will continue to fall." Don't dare to act rashly. ”
Huahua expressed her opinion: "I think it is because the economic situation is uncertain, and the risk of investing in gold has become greater, and it is not a simple price issue. Who would dare to invest a lot of money at this time? ”
The financial coffee complained: "Don't look at the low price of gold now, but who can guarantee that it will not be lower tomorrow?" With this instability in the market, it is better to hold on to cash first. ”
The financial novice asked: "Isn't gold a safe-haven asset?" Isn't this the case where you should buy? Why is there such a lukewarm response? ”
The retired aunt said: "I'm going to wait and see, after all, the current economy is too unstable, although gold is good, you have to have the confidence to live." ”
"The market is so weak, it's better to wait and see, after all, we should be cautious in investment, and now this wave of operations is too difficult to predict." ”
Professional investor analysis: "It may be that everyone is waiting for a clearer economic signal, and it is still a bit early to start." Let's look at the international situation. ”
Xiao Zhang, a college student, said excitedly: "Although I don't have much spare money on hand, looking at this trend, if I have the opportunity, I may consider buying a little as a learning experience." ”
Veteran gold market watchers predict: "This price volatility is likely to continue, and it is better to be prepared for a long battle and not expect quick profits." ”
Through the comments of these netizens, we can see that the market has mixed emotions and diverse expectations for the current downturn in gold prices. Although the price is low and theoretically a good opportunity to buy, most people choose a conservative strategy due to economic uncertainty. In this case, the future direction of the market seems to be full of uncertainties.