Persistent low-level fluctuations in the gold price have left investors uncertain.

"Gold keeps falling; fortunately, I liquidated a portion of my gold holdings earlier," one investor remarked, expressing that while they remain optimistic about gold in the long term, the current low and volatile price environment has made them hesitant to enter the market. Conversely, other investors are considering buying on the dip to hedge against losses from higher-priced positions.

On May 28, spot gold fell below $4,400 per ounce during trading, dropping over 1.5%. At the time of writing, spot gold was trading at $4,386 per ounce, down 1.54%, while COMEX gold stood at $4,420 per ounce, down 1.37%.

With gold prices fluctuating at low levels, investors face the dilemma of whether to add to their positions or cut their losses.

"Feels like gold can't recover," commented one investor on social media, indicating plans to potentially exit the gold market and shift to other sectors depending on the next day's situation, citing deep disappointment. Another investor stated, "Didn't expect my worst investment this year to be gold."

The declining and volatile gold price has spread frustration among investors.

Since May, spot gold has declined for two consecutive weeks, with a cumulative monthly drop exceeding 3%. Since reaching a historic high near $5,600 per ounce earlier this year, gold has retreated over 20%.

"After breaching the $4,400 level, the immediate key support for spot gold lies in the $4,370–$4,400 range. If it falls further, the strong support zone is expected around $4,200," noted senior financial regulatory policy expert Zhou Yiqin.

Zhou Yiqin believes the current fundamentals remain bearish, with a strong US dollar and elevated US Treasury yields suppressing a rapid gold rebound. However, continued central bank gold purchases globally provide underlying support, making a sustained deep decline unlikely in the short term. Overall, gold is expected to enter a phase of sideways consolidation within the $4,000–$4,200 range, with seesawing movements to digest bearish momentum and rebuild potential for a rebound.

Tian Lihui, Dean of the School of Finance at Nankai University, added that after losing the $4,400 level, short-term key support is located in the $4,375–$4,380 range. A break below this zone could trigger technical selling pressure, potentially pushing gold to test $4,240 or even $4,100.

"A rebound would require two key conditions: a significant drop in June's core PCE data to alter rate hike expectations, or a sudden escalation in Middle East tensions. Until the Federal Reserve sends clear dovish signals, a fluctuating downtrend remains the primary trend. However, if US inflation shows a turning point, gold could quickly recover above $4,500," Tian Lihui stated.

He further noted that future stability heavily depends on progress in US-Iran negotiations and marginal changes in interest rate expectations driven by PCE inflation data. The market has already priced in pessimistic expectations, and a drop below $4,300 might attract long-term allocation funds to gradually enter, forming a "sharp drop, slow recovery" pattern.

With gold prices fluctuating at low levels, several banks have begun "easing" gold investment channels: China Construction Bank and Industrial and Commercial Bank of China have lowered product risk ratings, while Industrial Bank has extended trading hours.

A May 25 announcement from China Construction Bank indicated adjustments to product and client risk rating names. The personal gold accumulation business maintained its R4 risk rating, but the description changed from "relatively high risk" to "medium-high risk."

Industrial and Commercial Bank of China also adjusted its Ruyi Gold Accumulation business. Effective May 19, 2026, the product risk rating was adjusted to R2 (medium-low risk), corresponding to a client risk tolerance level of C2 (conservative) or above.

In April, Industrial Bank partnered with JD Jin Yue (Xiamen) Digital Technology Co., Ltd. to distribute gold accumulation products. Starting May 8, 2026, the trading hours for gold accumulation current and regular fixed-term products (excluding physical redemption) via mobile banking and personal online banking were extended from 9:00–23:00 on trading days to 9:00–02:00 the next day.

Industrial Bank stated that due to multiple factors causing significant volatility in precious metals prices, and to mitigate risks from market fluctuations, the bank will adjust service times as needed based on gold market changes and disclose relevant information to clients.

Previously, banks including China Construction Bank, China Merchants Bank, Bank of Jiangsu, and China Minsheng Bank had already extended gold accumulation trading hours, introducing night session services.

Tian Lihui views banks' adjustments to gold risk labels as reflecting a prudent assessment after volatility subsided, not necessarily indicating a bullish trend. China Construction Bank's minor tweak from "relatively high" to "medium-high" risk description primarily stems from reduced extreme short-term volatility after gold retreated nearly 20% from its $5,600 peak.

"Risk rating adjustments are lagging indicators, and banks' retail business focuses more on client suitability management than market predictions," Tian Lihui noted, warning against interpreting such moves as "policy support signals." The recent easing of investment restrictions by multiple banks is essentially a response to the natural market correction and risk repricing, not a fundamental revision of gold's long-term logic.

Wu Zewei, a special researcher at Suzhou Bank, also commented that banks' recent synchronized adjustments to gold accumulation businesses are more an objective response to the temporary decline in market volatility rather than a directional judgment on future gold price movements. This round of adjustments reflects that gold accumulation businesses are transitioning from passive reactions to proactive adaptation, with risk management systems becoming more refined.

Has the valuation logic shifted? The market is rebalancing from a "safe-haven driven" to an "interest rate pricing" logic.

"The continuous decline in international spot gold since May is primarily driven by a reversal in policy expectations due to stronger-than-expected US inflation data," Tian Lihui pointed out. April's CPI at 3.8% year-on-year (core at 2.8%) disrupted the disinflationary trend, pushing the 10-year US Treasury yield to 4.66% and the 30-year above 5.2%, significantly increasing the holding cost for gold as a zero-yield asset.

Tian Lihui added that compounded factors include India's sharp increase in gold import tariffs from 6% to 15%, dampening physical demand, and a temporary dulling of geopolitical safe-haven sentiment. Multiple bearish factors have converged. Market expectations for a Fed rate cut this year have plummeted, with discussions even emerging about a potential 2027 rate hike. The prolonged high-interest-rate environment, exceeding expectations, directly pressures gold's valuation logic.

Can ongoing central bank gold purchases globally offset downward pressure on gold prices? Tian Lihui indicated a temporal mismatch between the long-term logic of central bank buying and short-term trading dynamics. In Q1 2026, global central banks' net gold purchases totaled 244 tons, above the five-year average. However, such allocations are strategic, steady, and not market-timed.

Tian Lihui stated that the current gold price decline is led by the rapid exit of trading capital, with gold ETFs experiencing historic outflows and hedge funds sharply reducing net long positions. Current central bank buying volume only accounts for about 20% of annual global gold demand, insufficient to counter the impact of short-term leveraged position unwinding and speculative selling. The market is undergoing a rebalancing from a "safe-haven driven" to an "interest rate pricing" logic.

Looking ahead, an Orient Jincheng research report noted that fundamental disagreements remain between the US and Iran on core issues like nuclear matters, with significant uncertainty regarding any agreement. Simultaneously, rising market expectations that the Fed may not cut rates this year or even resume hikes will likely pressure gold prices. Overall, Middle East tensions will continue to dictate short-term gold price volatility. Supported by potential agreement expectations, gold is likely to exhibit a relatively strong, fluctuating recovery pattern.

"The core contradiction in the current gold market lies in the repeated tug-of-war between expectations for geopolitical de-escalation and the risks of actual implementation," mentioned a Cinda Futures research report. The market may briefly trade on de-escalation hopes but is reluctant to fully believe the conflict is truly over.

Cinda Futures added that overall, gold remains in a state of tug-of-war, with poor trend continuity. Strategically, chasing rallies or selling on dips is not recommended; trading around key data and news events is more suitable. The long-term bullish logic remains unchanged, with each pullback to support levels viewed as potential entry points for long positions.