Gold prices saw an unexpected drop during the National Day Golden Week. According to statistics, the domestic base gold price fell in just one week by more than 6 months, which is comparable to the price in mid-March. The sudden price cut caught many investors who bought gold before the holiday by surprise. Not only has this happened in China, but the international gold price has fallen by more than 11% since its peak in May, affected by the Fed's interest rate hike expectations. Many people try to cut the bottom when the price is cut, but they are caught in a deep trap. During the National Day Golden Week, many netizens lamented that the price curse of "on a long holiday, gold must fall" appeared again. A netizen named "Shun Oguri" said that due to her recent engagement, she has been buying a lot of gold jewelry since late September.
However, with the correction of the domestic gold price, the price of the gold jewelry she bought also fell. Around National Day, she lost about 7,800 yuan in the total price of the 260 grams of gold she bought. The price of gold is falling across the market, and the price of gold jewelry of major brands has also fallen by about 6% from its high. In the case of Chow Tai Fook, the price of gold fell by 25 yuan on October 7 compared to September 24, and the price fell to 587 yuan per gram. The price movement of the entire gold market is deplorable. Gold prices fell sharply during the week, mainly due to the strengthening of the US dollar due to expectations of a rate hike by the Federal Reserve. The US dollar and gold have always shown an opposite relationship, and when the US raises interest rates, the US dollar strengthens, causing the price of gold to fall. Conversely, when the US rate cuts or the dollar weakens, the price of gold rises.
In addition, the decline in the international gold price was also affected by the strong performance of the US economy. Domestic gold prices have been in an independent market, and from May to September this year, the price of gold in the international market gradually climbed to a record high, but the domestic gold price climbed all the way. However, domestic gold prices have also recently begun to fall, for example, the price of gold at the Wante International Jewelry Exchange Center, a jewelry street in Beijing, has fallen by nearly 30 yuan per gram. Domestic gold prices are still influenced by international markets, but the correction is limited. The difference in domestic and international gold prices is around 5%. Despite the recent decline of more than 11% in London, the domestic base gold price rose from May to mid-to-late September. Young people are beginning to lead a new round of "buying gold".
Although the post-80s generation has a relatively weak understanding of gold, their minds have changed quickly, and now they start buying gold. For example, they will buy a golden melon seed or a few golden beans, or save money for a gold bracelet, or even use gold for birthday gifts. Therefore, although the price of gold has fallen quite a bit recently, this can only be called a correction, not a plunge. Gold investment has become the new favorite of young people. Gold has consistently outperformed other investment products, with the price of gold rising more than fivefold over the past 30 years and yielding an annualized return of 5.8%. Gold has performed well in five of the past seven recessions, helping investors cut their losses. In addition, the choice of gold is also inseparable from the increasingly pragmatic outlook on life of young people.
Gold can be exchanged for money at any time, and it is more cost-effective to buy gold than diamonds. This, combined with the decline in purchasing power caused by the current global economic shock, has also exacerbated the shift towards a more conservative view of consumption. Therefore, gold investment has become a new choice for young people to manage their finances.