Gold prices surge significantly! Banks collectively warn of risks; investors face a dilemma of "stay or leave"

Gold prices surged again after several days of continuous decline. On March 25, international spot gold prices temporarily rebounded to $4,599 per ounce, an increase of 2.84%. As of press time, gold prices have retreated to $4,548.51 per ounce, up 1.71%.

Faced with the “rollercoaster” fluctuations in gold prices, many investors say they are “completely亏麻了” (“lost all nerve”) and “no longer entering the market,” but some investors are “bottom fishing.”

Prices of precious metals fluctuate sharply, and banks have issued notices again warning of risks. Several banks advise clients to strengthen risk awareness, invest rationally based on their financial situation and risk tolerance, and control their positions reasonably.

Some are “亏麻了” (“completely lost nerve”) and want to exit, while others are firm in “buying the dip”

“I bought gold at 1100 yuan/gram, and it fell to a point I couldn’t hold on.” Beijing resident Zhang Zheng recently watched gold prices keep falling—should he sell to stop the loss or keep adding to average down? He hesitated. According to his investment “curse,” “selling will cause it to rise, adding will cause it to fall.” But in the end, he decided to add another 50 grams of gold.

In an interview with Beike Finance, many investors said that the recent consecutive days of falling gold prices have wiped out all last year’s unrealized gains; some also openly said that although gold is a safe-haven asset, they have been losing money and just want to quickly recover their principal and exit.

“Since I bought gold, I can’t help but watch the prices every day. I haven’t made a penny and have lost several ten thousand yuan,” said Wang Mo, who lives in Shanghai, adding he just wants to break even and then sell all and stop investing.

However, many investors are indifferent to the recent volatility of gold. In their view, gold still has an upward trend in the long run, so “buying the dip” has become their choice.

Beijing investor Li Ting is among these investors. She believes that the international situation remains turbulent, and the correction after gold hit a high point is normal. But in the long term, gold still has room to rise, so her “creed” for investing in gold is “look at the long term, not the short term.”

Data shows that from the holdings of gold ETFs, during the last week of continuous declines in gold prices, the domestic gold T+D trading volume increased significantly, with a total weekly trading volume of 297,924 kilograms, up 23.04% from the previous week.

Banks once again “call out” to investors to “stay calm”

Recently, the prices of precious metals have continued to fluctuate, and the “rollercoaster” market has significantly increased the investment risks of gold and other precious metals. In response, many banks have issued market risk warning notices again, “calling out” to investors, reminding everyone to stay calm and rational when investing in gold.

“Investors must maintain a calm and rational investment mindset, fully assess their own risk tolerance, and avoid blindly chasing gains or selling in panic driven by short-term market emotions,” ICBC advised. From a long-term asset allocation perspective, they suggest adhering to the principles of “total control, phased entry, and diversified layout,” extending the investment cycle to smooth out short-term volatility and build a more stable asset portfolio.

China Construction Bank also reminds investors to enhance risk awareness in precious metals business, invest rationally and prudently based on their financial situation and risk capacity, allocate precious metals in a balanced and moderate manner, control positions reasonably, and avoid blindly following trends. Additionally, they advise timely monitoring of holdings and margin balances to prevent market risks.

Bank of China also issued a notice urging investors to be prepared for market risks, invest rationally based on their financial situation and risk capacity, control precious metals positions reasonably, and reduce the impact of phase price fluctuations through long-term investment, thus preventing capital losses caused by market volatility.

Market analysts and institutions generally believe that short-term gold price fluctuations will continue, but long-term factors are favorable for gold prices. They recommend long-term and diversified investing.

Zhaolian’s chief economist Dong Ximiao said that many factors influence gold prices, including international situations causing oil prices to be unstable, and possibly multiple other factors. First is the Federal Reserve’s policy signals, which are currently the most direct influence. If market expectations of rate hikes further strengthen, gold will face significant selling pressure. Second are key economic data, especially U.S. inflation data (CPI, PCE) and employment reports. Third is the U.S. dollar index and Treasury yields, as gold usually shows a strong negative correlation with both.

“International situations are still uncertain, and gold prices may still face downward pressure,” said Qu Rui, an analyst at Dongxing Securities. He predicts that gold prices will show a “short-term pressure, medium- to long-term outlook” trend.

In terms of operations, Qu Rui recommends investors stay on the sidelines in the short term to avoid bottom-fishing risks and wait for support levels to be confirmed; in the medium to long term, they can seize the opportunity for a correction, build positions gradually, and consider gold as a 5%-10% hedge in their asset portfolio. Focus should be on key catalysts such as the Federal Reserve’s rate cut window and developments in the Middle East, while remaining alert to potential risks like inflation exceeding expectations and escalating geopolitical conflicts.

Beike Finance reporter Jiang Fan, editor Chen Li, proofreader Lu Qian