Spot Gold Price Breaks Below $4,500, Creating Largest Weekly Decline in 43 Years

Spot gold prices fell below $4,500, marking the largest weekly decline in 43 years.

Data shows that on March 20, spot gold (London Gold Fix) briefly rebounded before falling sharply within the day, with a V-shaped intraday movement, ultimately dropping 3.42% to $4,491.67 per ounce. This week, it plummeted 10.24%, the largest weekly decline since March 4, 1983. Spot silver (London Silver Fix) fell 6.8% to $67.897 per ounce, with a weekly decline of 12.687%.

On March 20, international precious metals futures also mostly declined. COMEX gold futures fell 2.47% to $4,492.00 per ounce, with an 11.26% decline for the week; COMEX silver futures dropped 4.78% to $67.81 per ounce, but still gained 16.64% this week.

As gold prices retreat, domestic gold jewelry brands have also seen significant price drops. Chow Tai Fook’s official website shows that on March 20, the price of pure gold jewelry was 1,447 yuan per gram, down 56 yuan per gram from the previous day, and a total decrease of 104 yuan per gram over the past two days.

Market opinions suggest that diverging global central bank monetary policy expectations, combined with increased dollar hedging demand due to Middle East geopolitical conflicts, have led institutions to turn bullish on the dollar, suppressing precious metal investments. Additionally, cautious market sentiment has contributed to the weakening of precious metal prices.

According to Xinhua News Agency citing U.S. media reports on the 20th, the U.S. military is dispatching three more ships and about 2,500 Marines to the Middle East. However, after the U.S. stock market closed, Xinhua reported that President Trump posted on social media that “we are very close to achieving our goal,” indicating that the U.S. is considering gradually de-escalating military actions against Iran.

Analysts point out that the gold correction reflects a combination of profit-taking and position unwinding, driven by concerns over the easing of monetary policy. When gold prices exceeded $5,200, heavy buying attracted more investors, making a correction more likely. As prices began to fall, many investors triggered stop-loss orders—automatic sell orders at certain levels—accelerating the sell-off.

A senior analyst at Swiss bank Credit Suisse stated that rising oil prices boost demand for the dollar. Currently, driven by Middle East tensions and with oil prices as a key variable, global investors prefer to go long on the dollar or hedge risks with dollars rather than switch to gold.

Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals, said that while war provides some safe-haven support, it is only a secondary factor. The Federal Reserve’s outlook to keep interest rates unchanged until 2027 negatively impacts gold.

However, the CIO office of UBS Wealth Management stated in an institutional outlook on March 20 that geopolitical uncertainties, continuous reserve increases by multiple central banks, the U.S.’s low real interest rates, and investor demand for safe-haven assets will continue to support gold prices. It is expected that gold could reach new highs this year. Looking ahead to 2026, the overall outlook for commodities remains optimistic. Structural trends such as supply-demand imbalances, energy transition, and global AI infrastructure development will drive strong returns in commodities. Investors are advised to allocate a small percentage of their diversified portfolios to commodities. Specifically, moderate overweighting in energy—due to potential short-term shipping disruptions pushing prices higher—and agricultural products—due to high fossil fuel prices increasing biofuel demand and rising fertilizer costs—are recommended. Gold and precious metals allocations should also be above baseline levels.

Despite recent significant corrections, spot gold prices have still risen 4.02% this year; spot silver prices have shifted from gains to declines, with a year-to-date drop of 5.14%.

(Source: The Paper News)