Gold's appeal is currently fading, with institutions lowering their short-term price targets, leading to a significant divergence among investors in accumulated gold products.

An investor in the e-commerce sector, Mr. Zhang, expressed a pessimistic view on gold, having purchased accumulated gold at 1,020 yuan per gram and now facing continuous losses. He believes gold prices may fall further and has paused his gold-related investments, shifting to increasing his holdings in semiconductors to average down costs.

The recent decline in gold prices has exceeded market expectations. Interviews reveal that investors who entered the accumulated gold market at high levels are generally facing losses, with market sentiment showing a clear split. Some investors are cutting losses and exiting, long-term allocators are using the dip to increase positions, while many others are holding cash and observing. These three distinct approaches reflect differing investment logics among various groups.

Concurrently, some research institutions have lowered their short-term gold price forecasts, anticipating continued pressure in the near term. Industry experts point out that the current pressure on gold stems from a combination of factors including heightened expectations for Federal Reserve rate hikes, a stronger US dollar, and weaker physical demand. The short-term downtrend for gold is difficult to reverse, though the long-term investment thesis remains intact. The divergence in investor sentiment and actions essentially stems from differing perceptions of gold's attributes, investment horizons, and risk tolerance.

With the recent continuous decline in domestic gold prices, market participant sentiment has become notably divided. Different investors are making distinctly different operational choices based on their own judgments, leading to a prevailing atmosphere of caution in the accumulated gold market.

Many investors holding positions at high levels now find themselves in a dilemma. One investor, Mr. Xu, is a representative case, having purchased 100 grams of accumulated gold at 1,131 yuan per gram. Faced with the ongoing price decline, he is caught between selling at a significant loss or holding while fearing further drops—a situation mirroring that of many current investors.

Some investors have chosen to cut losses promptly and suspend new investments. A Beijing-based educator, Ms. Li, stated she has paused her bank accumulated gold fixed investment plan. She is not alone; many investors, unwilling to bear further price volatility risks, have halted their fixed investments, with some choosing to sell at a loss to limit the damage.

In contrast, long-term investors are seizing the opportunity to add to their positions. Mr. Su, working in Beijing's finance sector, began allocating to accumulated gold in the first half of 2025. Unfazed by the current price drop, he remarked, "Gold is suitable for long-term positioning; short-term price fluctuations are not a major concern. I plan to hold for eight to ten years and will continue adding to my position at this stage."

Frontline bank professionals are also directly sensing the market's cooling. A client manager at a major state-owned bank, Ms. Zhu, noted that while gold prices have retreated to around 916 yuan per gram, there are very few clients inquiring about accumulated gold products. "The common psychology is to buy on rallies, not dips. Many investors anticipate further downside for gold prices and are choosing to wait," she explained. She added that gold holds long-term allocation value and can hedge against risks from short-term price volatility.

Discussing the three prevailing sentiments among accumulated gold investors—"cutting losses and exiting," "buying the dip," and "waiting and seeing"—a special researcher from a commercial bank, Wu Zewei, stated that the core reasons for this operational divergence are multiple differences in entry costs, risk appetite, and time horizon perceptions. Different investors entered the market at varying points; those who entered at high levels are facing significant paper losses, and those with lower risk tolerance are choosing to exit. Long-term allocators with lower cost bases, still bullish on gold's medium-to-long-term value, are choosing to add on dips. Simultaneously, there is clear disagreement in market judgments on gold's price direction. Short-term trading capital focuses more on Federal Reserve policy volatility, while long-term capital anchors on core logics like global central bank gold purchases. Combined with differing investment horizons and purposes, these factors ultimately shape the three distinct operational strategies.

Nankai University finance professor Tian Lihui added that investor divergence essentially stems from differences in investment logic and risk preference. "Short-term speculators view gold as a trading instrument, their actions easily driven by market sentiment, prone to triggering stop-losses during pullbacks. Long-term allocators, however, base their decisions on gold's safe-haven and inflation-hedge attributes, prioritizing portfolio safety, and are more inclined to position contrarily during market volatility." Furthermore, mismatches in capital nature and investment horizon exacerbate the split. Highly leveraged capital is pressured to exit, while those investing idle funds via fixed investments show more resilience. At its core, this reflects a profound divergence in how different investors perceive gold's "financial attributes" versus its "monetary attributes."

Regarding the underlying drivers of the recent sustained gold price correction, Professor Tian Lihui believes the pressure stems from a confluence of multiple factors. The primary factor is a reversal in Federal Reserve policy expectations; market bets on rate hikes have increased, pushing up US Treasury yields and the US dollar, significantly raising the cost of holding gold. Secondly, capital is chasing more certain assets like AI, reducing the appeal of gold as a non-yielding asset. Additionally, geopolitical risk premiums are being eroded by the high-inflation environment, with safe-haven demand temporarily giving way to interest rate logic. This is compounded by technical breakdowns triggering waves of stop-loss selling, creating a negative feedback loop. "The market is undergoing a paradigm shift from 'loose policy trading' to 'tight policy pricing'," Professor Tian emphasized.

From Wu Zewei's perspective, a significant adjustment in overseas macro expectations is the core driver of gold's weakness. Several US economic indicators have outperformed expectations, with strong employment data and persistent inflation, leading the market to largely abandon expectations for Fed rate cuts this year and even see signs of rising rate hike expectations. This has boosted the US dollar index and Treasury yields, substantially increasing the opportunity cost of holding gold. Simultaneously, the recent rapid decline in gold prices, breaching multiple key technical support levels, has triggered concentrated stop-loss selling from trading capital. Combined with a temporary ebb in geopolitical safe-haven sentiment, these factors have collectively pushed gold into an adjustment cycle.

Looking ahead, some research institutions maintain a cautious stance on gold's near-term prospects, expecting prices to remain under pressure. A report from Citi on June 8 predicted that weak physical gold demand would continue to weigh on prices. Strong US employment data boosting the dollar further suppresses dollar-denominated gold prices. The report also warned that if the Strait of Hormuz blockade persists into late summer and physical gold buying demand continues to shrink, international gold prices could fall to $3,500 per ounce.

Regarding the subsequent market trend, Wu Zewei judges that gold prices are likely to maintain a weak and volatile pattern in the short term. Institutions lowering short-term price targets reflect the market pricing in a prolonged high-rate environment, but the core logic for a medium-to-long-term rise remains intact. Key factors influencing future gold prices will still be the timing of the Federal Reserve's monetary policy pivot and changes in US economic fundamentals. Investors should closely monitor core US economic data like non-farm payrolls and CPI, the policy signals from Federal Reserve meetings, and the movements of the US dollar index and Treasury yields. Long-term allocators can consider accumulating positions on dips in stages, while short-term traders need to control position sizes and be wary of market volatility risks.

Professor Tian Lihui believes gold prices may remain volatile in the short term, with medium-term prospects uncertain. Core influencing factors include the Federal Reserve's policy path (focusing on inflation data and meeting signals), the potential for escalated geopolitical risks (such as spillover from Middle East tensions), and the sustainability of global central bank gold purchases.

Simultaneously, Professor Tian reminds investors to be wary of short-term volatility traps and to focus on gold's long-term allocation value. He suggests tracking US CPI, PPI, and the Fed's dot plot, while also paying attention to the pace of central bank purchases. Strategically, methods like "fixed investment to smooth costs" or "range grid trading" can be employed to avoid one-sided bets and maintain portfolio resilience. Ultimately, gold remains the "ballast" of the fiat currency system, and its value will eventually revert to fundamental logic.