A consumer surnamed Chen expressed hesitation while shopping for gold jewelry at a Sam's Club store on March 21. "I didn't buy when it was just over 20,000 yuan last year. It later surged to 36,000 yuan, and now it has dropped to 34,000 yuan. I'm not sure whether to buy now," she said.

The 25g pure gold bracelet that caught Chen's eye has experienced significant price swings over the past year. According to customer-provided photos from Sam's Club, the bracelet was priced at 20,079 yuan in February 2025. By mid-February 2026, the price had risen to 36,049 yuan, representing an increase of nearly 80% within a year. Recently, the price tag was adjusted to 34,009 yuan, marking a decline of 2,040 yuan from the peak two months prior.

As of March 22, international gold prices were approximately $4,494 per ounce, while domestic gold prices in China stood around 1,010 yuan per gram. The continuous decline in international gold prices has led to corresponding adjustments in domestic branded gold jewelry prices. Latest market data from March 22 shows that Chow Tai Fook's pure gold price fell to 1,397 yuan per gram, and Saturday Gold reported 1,392 yuan per gram. Both brands experienced notable declines from the previous day, falling below the 1,400 yuan per gram threshold.

Entering late March, international gold prices continued their downward trend. Recent market data indicates that spot gold prices dropped to approximately $4,560 per ounce, significantly lower than the previous peak above $5,000.

Gold futures for April delivery on the New York Mercantile Exchange fell from $5,061.70 per ounce last Friday to below $4,600 per ounce this Friday, recording a weekly decline of 9.62%—the largest single-week drop in 15 years. Similarly, London spot gold performed weakly, breaking below $4,500 per ounce and declining for the eighth consecutive trading session, with a weekly loss exceeding 11%.

The price correction has led to divided sentiment among consumers. "I recently bought gold following the upward trend, but ended up buying at a high point. Now I'm facing losses instead of gains," said consumer Lin Keyu, noting that many investors who entered the market at peak levels have encountered setbacks.

Meanwhile, some consumers have begun reconsidering entry points. A shopper browsing gold jewelry at a mall mentioned that the recent price drops made her "somewhat tempted." She added, "I previously thought it was too expensive, but now I'm considering buying in increments."

"Generally, the deeper the gold price falls, the higher the potential rebound," commented Zhu Zhigang, Supervisor and Chief Analyst of the Guangdong Gold Association. He offered three recommendations for navigating gold's volatility: First, recognize gold's role as a "safety cushion," allocating 5% to 15% of household assets using long-term idle funds. Second, choose suitable investment vehicles, such as gold ETFs or bank investment bars. Third, adopt a phased investment approach, avoid leverage, and use dollar-cost averaging to smooth out costs, while refraining from borrowing to speculate on gold.

Why has this traditional safe-haven asset underperformed? Typically, escalating geopolitical risks boost gold's appeal, but this time prices fell contrary to expectations. Analysts attribute this anomaly to a shift in market focus from "geopolitical hedging" to "inflation expectations and monetary policy dynamics."

Recent tensions in the Middle East drove international oil prices higher, raising concerns about a resurgence in global inflation. "This counterintuitive movement in gold prices stems from interest rate dynamics overshadowing safe-haven demand," Zhu explained on March 22. He noted that this round of declines exhibited certain "reverse characteristics."

"Conventionally, geopolitical conflicts boost gold, but this time oil prices rose first," Zhu analyzed. Rising oil prices fueled inflation expectations, which in turn reduced market expectations for Federal Reserve rate cuts. A stronger U.S. dollar subsequently weighed on gold prices.

Additionally, after gold's rapid ascent, some institutions opted to take profits, exacerbating the technical correction. As gold broke below key psychological levels, market sentiment diverged significantly. Some investors began "bottom-fishing," while others faced paper losses after buying at highs.

"Many investors are indeed trapped, as quite a few chased the rally earlier," Zhu acknowledged. Regarding future trends, he highlighted two possibilities: one where prices rebound above $5,000 and fluctuate, and another where gold consolidates at lower levels if the dollar remains strong, potentially testing support around $4,500.

Notably, central banks continue to purchase gold, albeit at a slower pace, providing some underlying support. Zhu advised investors to treat gold as a long-term allocation, control position sizes, invest gradually, and avoid chasing rallies or panic selling.

Is this a deep correction or the end of the bull market? In 2025, gold futures surged over 65%, marking the metal's strongest annual performance since 1979.

Thomas Winmill, Portfolio Manager at Midas Funds, noted that the historic rally leading into 2026 was driven by investors seeking hedges against "potential negative impacts of current news cycles on stocks and bonds." Reports on shifting U.S. tariff policies, military actions in Venezuela, Iran, Greenland, and domestic urban areas may have unsettled investors.

Moreover, rising national debt has eroded confidence in the U.S. dollar. If this trend continues, it could negatively affect financial assets like stocks and bonds, while benefiting gold.

Although the specific drivers of gold's recent strength may differ from the past, its performance is not anomalous. "Gold, like any hard asset, can be highly volatile," Winmill stated. For instance, gold prices surged over 100% in 1979 and nearly 30% in 1980, before dropping about 33% in 1981.

Despite short-term setbacks, several Wall Street institutions remain optimistic about gold's long-term prospects.

Analysts believe ongoing central bank gold purchases, de-dollarization trends, and geopolitical uncertainties will continue to support gold prices. J.P. Morgan maintains its year-end 2026 gold futures target of $6,300 per ounce, while Deutsche Bank holds its long-term target of $6,000 unchanged. Some market analysts suggest the current plunge resembles a deep correction within a bull market rather than a trend reversal.

Zhu Zhigang sees two potential scenarios: a rebound above $5,000 followed by consolidation, or further declines if dollar strength persists. "Geopolitics remains the primary driver of gold prices. This factor still exists but is temporarily overshadowed by the dollar. Should a catalyst emerge, gold could rebound swiftly. I maintain that gold prices could surpass $6,000 in 2026," he concluded.