"9 Trillion Poured In, Then a Crash"... Chinese Gold Investors in Turmoil

Chinese Gold Prices Fall Amid Weak International Market

Shanghai Gold Exchange Urges "Caution in Risk Management"

As gold prices continue to decline in China, the Shanghai Gold Exchange has taken the unusual step of urging investors to exercise caution in their investments.

According to Dushi Kuaibao, a local Chinese media outlet, on the previous day the Shanghai Gold Exchange issued a notice stating, "Recently, increasing market instability has led to significantly heightened volatility in precious metal prices."

The exchange further advised, "Investors should closely monitor changes in market conditions and thoroughly prepare risk management plans to help maintain stable market operations."

Gold. Photo is not related to any specific content of the article. Pixabay

Recently, there has been a surge of individual investment capital into gold in China amid a gold investment boom. According to the World Gold Council (WGC), in January alone, Chinese gold exchange-traded funds (ETFs) saw inflows of 44 billion yuan (approximately KRW 958 billion), the second largest monthly inflow on record. In the same month, the total net assets under management (AUM) of Chinese gold ETFs reached 333 billion yuan (approximately KRW 7.25 trillion), and holdings hit an all-time high of 286 tons.

This has been interpreted as the reason why China, unusually, emphasized risk management through a quasi-public institution such as the exchange.

While international gold prices have recently been weak, gold prices in China have also continued their decline. As of March 21, Beijing time, the London spot gold price fell below $4,500 per ounce, dropping 10.49% on a weekly basis—marking the largest weekly decline since March 1983. As of March 23, the price of gold in China fell below 1,000 yuan (approximately KRW 218,000) per gram, fluctuating around 963 yuan (about KRW 210,000) during intraday trading.

Gold jewelry prices are also falling in the retail market. At Lao Miao Gold, a Chinese precious metals chain, the price of gold products was 1,363 yuan per gram, down 50 yuan from the previous day (1,413 yuan). Major brands such as Chow Tai Fook, Luk Fook Jewellery, and Chow Sang Sang also saw gold prices fall below 1,400 yuan per gram.

Although gold is considered a representative safe-haven asset, concerns over inflation driven by oil price shocks from the Middle East war have contributed to its continued decline. In addition, weakening expectations for a U.S. Federal Reserve (Fed) rate cut and the strengthening of the U.S. dollar have also contributed to the sustained downward trend.

This content was produced with the assistance of AI translation services.