The precious metals market recently experienced roller-coaster volatility. On March 3, international precious metals markets saw a sharp decline, with London silver falling over 12%. Spot gold briefly dropped below the $5,000 per ounce mark, plummeting more than 6% during the session. Spot platinum and palladium closed down 9.56% and 7.24% respectively.
One investor noted, "I bought gold at the peak before the Spring Festival at 1,240 yuan per gram and added more later. Now I'm caught in another downturn before recovering from the last one." The investor had expected geopolitical tensions to push gold prices higher but instead faced a steep drop.
By March 4, London spot gold had partially recovered, trading above $5,170 per ounce with a 1.67% gain. Precious metals have performed strongly this year, with London spot gold up 19.80% year-to-date and spot silver rising 19.12%.
Amid sharp gold price fluctuations, major state-owned banks have again adjusted their precious metals policies. On March 3, China Construction Bank announced extended delivery times for physical precious metals orders to 10-15 business days due to surging demand. Starting March 4, the bank implemented dynamic trading limits on its gold products to enhance risk control.
Similarly, Industrial and Commercial Bank of China, China Postal Savings Bank, and China Everbright Bank issued risk warnings on March 2, strengthening precious metals risk management and advising investors to trade rationally and control positions.
Industry experts believe recent bank measures and exchange policies create a dual regulatory approach, guiding investors toward rational asset allocation and market stability.
The precious metals slump affected related A-share sectors. On March 4, gold concept stocks opened sharply lower, with Beijing Xiaocheng Technology Stock Co.,Ltd. falling over 10% before closing down 4.95%. Western Region Gold Co.,Ltd. and other gold stocks ended down more than 5%.
Despite escalating Middle East conflicts, gold and silver moved contrary to fundamental expectations, puzzling investors. Traditionally safe-haven assets falling amid rising避险情绪 raised questions.
Analysts explained that rising U.S. real interest rates outweighed geopolitical避险买盘 for gold. Equity market declines increased dollar demand, potentially causing gold sell-offs for dollar positions. Meanwhile, surging oil prices fueled inflation concerns, strengthening expectations that the Federal Reserve will maintain rates, further pressuring precious metals.
While gold and silver tumbled, oil prices strengthened amid geopolitical tensions. New York crude rose toward $77 per barrel on March 3. Some A-share oil stocks remained strong on March 4, with companies like Intercontinental Oil and Petrochemical Services hitting limit-up gains. Higher oil prices boosted inflation expectations, catalyzing dollar strength. The U.S. dollar index rose for two consecutive days, breaking above 99 to hit a 10-month high.
Looking ahead, analysts remain bullish on precious metals. They note that while short-term prices may fluctuate with dollar movements, medium-to-long-term factors like Fed rate cut expectations, persistent geopolitical risks, and growing global debt support gold's upward trend. Gold and silver are expected to maintain high volatility due to Middle East uncertainties, but their role as core assets for hedging global systemic risks remains intact amid ongoing central bank buying and dollar credibility concerns.