Gold prices continue to swing: some are taking heavy losses and want to exit, while others are firmly “buying the dip,” with banks collectively issuing risk warnings.

Beijing News Shell Finance reporter Jiang Fan; editor Chen Li; proofreader Lu Xi

After several days of continuous decline, gold prices quickly surged again. On March 25, the international spot gold price briefly rebounded to $4,599 per ounce, with a gain of 2.84%. As of the time of this reporter’s release, the gold price had pulled back to $4,548.51 per ounce, with a gain of 1.71%.

Faced with a “roller-coaster” gold price trend, many investors said they were already “way in the red” and “won’t enter again,” but some investors also said they were “buying the dip.”

With sharp volatility in precious metal prices, banks have once again issued announcements to warn of risks. Multiple banks advised that clients should enhance their risk-prevention awareness and make rational investments based on their own financial situation and risk tolerance, while appropriately controlling their position sizes.

Some people are “way in the red” and want to exit, while others firmly “add more on dips”

“I bought gold at 1,100 yuan per gram. When it fell to the point where I couldn’t hold it anymore.” Beijing resident Zhang Zheng has recently been watching gold prices keep falling—should he sell to stop the decline or keep adding to smooth out the cost? He has been hesitant. According to the “curse” surrounding his investment, “if I sell it will rise, and if I add it will fall.” However, in the end, he still decided to add another 50 grams of gold.

In interviews with reporters from Shell Finance, many investors said that the earlier multi-day decline in the gold price has already wiped out all the unrealized gains from last year. Some investors also said outright that although gold is a safe-haven asset, they have still been losing money, and they just want to break even as soon as possible and exit.

“Ever since I bought gold, I can’t help but watch the price every day. I didn’t make a single cent, and I even lost tens of thousands.” Wang Mo, who lives in Shanghai, said she only wants to wait until she breaks even, and then liquidate everything and stop investing.

However, many investors are not concerned about gold’s recent oscillations. In their view, gold still has an upward trend in the long run, so “buying the dip and adding positions” has become their choice.

Li Ting, an investor who lives in Beijing, is one of these investors. In her view, the international situation is still unstable and turbulent, and the pullback after gold earlier hit its highs is a normal phenomenon. But from a long-term perspective, gold prices still have room to rise, so “don’t look at the short term, look at the long term” has become her “creed” for investing in gold.

Data show that, judging by the holdings of gold ETFs, as gold prices kept falling last week, China’s domestic gold T+D cumulative trading volume surged significantly. The total for the whole week was 297924 kilograms, up 23.04% from the prior week.

Banks have once again “spoken up” to urge investors to “stay calm”

Recently, precious metal prices have continued to fluctuate. The “roller-coaster”行情 has significantly increased investment risks for gold and other precious metals. In response, multiple banks have again issued market risk warning announcements, urging investors to stay calm and rational when investing in gold.

“Investors must maintain a calm and rational investment mindset, fully assess their own risk-bearing capacity, and avoid blindly chasing rallies or selling impulsively driven by short-term market sentiment.” The Industrial and Commercial Bank of China stated that from a long-term asset allocation perspective, it recommends investors follow the principles of “control the total amount, enter in batches, and adopt diversified layouts.” By extending the investment horizon to smooth out the risks of stage-by-stage volatility, investors can build a more robust asset portfolio.

The China Construction Bank also warned that investors should enhance their risk-prevention awareness in precious metals business. Based on their own financial conditions and risk tolerance, they should make rational and steady investments, allocate precious metals in a balanced and appropriate manner, and reasonably control position sizes to avoid blind follow-the-crowd actions. Meanwhile, they should promptly monitor position status and changes in margin balances to prevent risks in the precious metals market.

Bank of China also issued a risk warning stating that investors should do a good job of preventing market risks. They should carry out rational investments based on their own financial situation and risk tolerance, reasonably control their precious metals positions, and reduce the impact of short-term price fluctuations through long-term investing, in order to prevent the risk of capital losses caused by market volatility.

Market analysts and institutions generally believe that while gold price volatility will still exist in the short term, there are favorable factors for gold prices in the long term. They recommend that investors invest for the long term and diversify their investments.

Dong Ximiao, chief economist at China United Network (招联), stated that there are many factors affecting gold prices. Besides international situations causing instability in oil prices, it may also be related to multiple factors. First is Federal Reserve policy signals. This is the most direct factor at present. If market expectations for rate hikes further strengthen, gold will face substantial selling pressure. Second is key economic data: especially U.S. inflation data (CPI, PCE) and employment reports. Third is the U.S. dollar index and yields on U.S. Treasuries. Gold, the U.S. dollar index, and the actual yield on U.S. Treasuries typically show a high negative correlation.

“Given that the current international situation is still unclear, gold prices may still face downward pressure.” Q Rui, an analyst at East”ern? (东方金诚), said that the gold price trend will show a path of “pressure in the short term and improvement in the long term.”

In terms of strategy, Q Rui advised investors to stay on the sidelines in the short term to avoid the risk of buying the dip and wait for support levels to be confirmed; for the medium to long term, investors can seize opportunities to build positions during pullbacks, accumulate positions in batches, treat gold as a hedging tool accounting for 5%-10% of an asset portfolio, focus on core catalysts such as Federal Reserve rate-cut windows and developments in the Middle East, and remain alert to potential risks such as inflation rising beyond expectations and the expansion of geopolitical conflicts.

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