After the huge震荡 in gold prices, is now the time to buy gold for bottom-fishing or to take over?

Last night (January 29), everyone watching the gold market probably experienced a roller coaster. International gold prices plunged $440 in one hour, breaking through three key levels at $5400, $5300, and $5200, with spot gold falling over 4%; the next morning, the domestic precious metals sector opened lower across the board, with multiple stocks like China Gold and Sichuan Gold hitting the limit down, and gold prices at offline gold shops and banks also retraced—some hurriedly liquidated their holdings in panic, others clenched their fists, ready to “bottom-fish,” and more people are asking behind the scenes: Should I buy gold now to scoop up bargains or to take over? Should I sell gold holdings quickly to lock in profits or hold through the volatility? Actually, there’s no need to panic. The “震荡” in gold prices has never been the end of the trend nor a signal to bottom-fish. The key is to distinguish: is this wave of rise and fall a short-term emotional disturbance or a long-term logical reversal? Today, let’s use the simplest words to analyze the core questions of current gold investment, so that ordinary people can understand and avoid the pitfalls of “chasing highs and selling lows.” First, understand: why did this wave of gold plunge happen?
Many people see the sharp drop in gold prices and their first reaction is “gold is cooling off,” but in fact, this “震荡 overnight” is mainly a short-term risk clearing, not a collapse of long-term support. There are three core reasons, and after reading, you’ll understand:
First, excessive short-term gains led to profit-taking. Since the beginning of 2026, London spot gold has increased over 20% year-to-date, soaring to a high of $5500 per ounce. The market has accumulated a huge amount of profit-taking, already in an “overbought” extreme, making a correction highly probable—like a car going too fast, you need to step on the brakes to slow down. This plunge is a concentrated release of inherent market fragility, a “cooling down” of the previous irrational surge.
Second, triple resonance triggered a “stampede-like” decline. Tian Lihui, director of the Financial Development Research Institute at Nankai University, pointed out that this plunge is the result of “rule adjustment + expectation shift + technical forced selling”: during the weak liquidity period at night, the CME and Bank of China adjusted margin requirements, combined with improved US economic data reducing rate cut expectations, causing gold to break through key psychological levels. This triggered algorithmic trading to close positions en masse, forming a negative feedback loop of “expectation correction—technical breakdown—leverage forced selling,” often called “more sellers than buyers,” further amplifying the decline.
Third, technical correction rather than logical reversal. Pan Helin, member of the Information and Communication Economy Expert Committee of the Ministry of Industry and Information Technology, added that the core logic behind the previous rise in gold—weakening of the US dollar’s credit, and the dollar’s decline driven by Trump’s policy expectations—has not changed. This decline is merely a technical correction, compounded by month-end futures contract expirations and some profit-taking, leading to short-term volatility. As of 22:28 on January 30, real-time gold prices showed London gold at $5065.1 per ounce, a plunge of $372.66 from the previous trading day, a 6.85% drop, with a high of $5450.28 and a low of $4935.71, a daily fluctuation of over $500, creating a roller coaster. Domestic gold T+D was at 1140.5 yuan/gram, down 41.38 yuan, a 3.50% decline, with a high of 1156.01 and a low of 1122.26 yuan/gram; Shanghai gold futures and New York gold futures also retraced, with declines of 4.49% and 5.16%, respectively. Combining real-time charts, we can better judge the current market and avoid misjudgments: from the 1-hour chart of London gold, the January 29 evening shows a “surge to a peak—cliff dive—oscillating pressure” three-step pattern: the Asian and European sessions continued strong, rising to a historic high of $5594.77 per ounce, then suddenly plunged around 23:00 Beijing time, dropping over $400 in an hour, quickly breaking through the levels at $5400, $5300, $5200, and $5100, even briefly falling below $5000. It then rebounded slightly but with weak momentum, remaining under $5100, forming a large bearish candle with very long upper and lower shadows, a typical short-term top signal, indicating exhaustion of bullish momentum and the beginning of a bearish dominance.
Looking at the domestic gold T+D chart, it closely correlates with international gold prices but with milder fluctuations: after a low opening on January 30, it oscillated without breaking previous support levels, staying within 1120-1150 yuan/gram, showing a “sideways consolidation” pattern, indicating relatively rational sentiment in the domestic market and no “stampede sell-off” like in international markets. This is also supported by continuous gold purchases by the central bank and physical demand, indirectly confirming that the domestic gold price correction is limited. It’s important to note that, from short-term charts (1-3 days), gold prices have already broken through key support levels (London gold at $5200/oz, domestic T+D at 1150 yuan/gram), with volume increasing, indicating ongoing selling pressure and no clear sign of bottoming yet. But from the medium- to long-term chart (1-year), the upward trend since 2025 remains intact, with gold still in a long-term rising channel. This correction is just a technical adjustment after a sharp rise, not a trend reversal. This further confirms the earlier point—short-term震荡 under压力, but long-term support remains unchanged. Simply put, real-time charts tell us: current gold prices are in a transition phase of “short-term correction, long-term optimism.” The large bearish candle on the short-term chart warns us not to blindly bottom-fish; meanwhile, the upward trend on the medium- and long-term chart reminds us not to panic excessively. The core is to focus on your investment cycle and avoid being misled by extreme short-term fluctuations.

Core question 1: Should I buy gold now—bottom-fish or take over? This is the most concerned question, and the answer is clear: ordinary people should not blindly “bottom-fish,” but also don’t fear “taking over,” depending on your investment cycle and purpose. Here’s the conclusion: in the short term (1-3 months), bottom-fishing now is likely “buying halfway up the mountain”; in the long term (more than 1 year), as long as you don’t chase highs and control your position size, gold still has value for allocation and is not considered taking over. Why not recommend short-term bottom-fishing? Because after this plunge, the market is unlikely to reverse V-shaped immediately but will enter a phase of oscillation and digestion of floating positions—similar to August 2020, when gold plunged over 5% in a single day from a historic high, then entered months of wide-ranging consolidation to digest extreme emotions and rebuild bullish and bearish balance. Tian Lihui also clearly stated that historical patterns show that after liquidity-driven “flash crashes,” markets tend to shift from a single-sided rise to high-volatility oscillations, with short-term trends full of uncertainty. Blind bottom-fishing only risks greater volatility. Why not fear taking over in the long run? Because the three core logical supports for gold’s rise remain unchanged:
a. The global “de-dollarization” trend continues, with central banks buying gold to support prices. By 2025, global demand and prices will hit record highs. The diversified and continuous central bank gold purchases provide solid support—China’s central bank has increased gold holdings for 14 consecutive months, Russia, India, and others are accelerating their purchases, and gold has even surpassed US Treasuries to become some countries’ largest reserve asset. This strategic gold buying will keep supporting the price floor.
b. Geopolitical risks and debt pressures coexist, safe-haven demand remains long-term. The Russia-Ukraine conflict persists, Middle East tensions simmer, and major economies’ debt levels remain high. The erosion of fiat currency credibility continues, and gold’s value as the “ultimate safe-haven asset” will only become more prominent. As long as uncertainties remain, safe-haven demand will support gold prices.
c. Medium- and long-term rate cut expectations remain, reducing holding costs. Gold is a non-yielding asset; the lower the interest rates, the smaller the opportunity cost of holding it. Market expectations for the Fed to cut rates in 2026 persist, and the dollar’s long-term weakening trend remains, which will continue to boost gold’s investment appeal. Over the long term, gold still has room for oscillating upward. A special reminder: if you are a beginner and see gold plunge and want to “bottom-fish for quick profit,” you are likely to take over—because you can’t handle short-term volatility and may panic-sell in oscillations. But if your goal is long-term asset allocation, hedging inflation, and balancing your portfolio risk, then gradually deploying now can lower your average cost and avoid taking over.

Core question 2: I hold gold now—should I sell or hold? There’s no standard answer, only two situations: your cost basis and your initial purpose for buying gold.
Situation 1: chasing high at a high level (e.g., before the January 29 plunge, buying gold at jewelry stores or gold stocks at high prices)—recommend reducing positions decisively and setting stop-losses. If you bought during the recent surge at high levels, you are probably at a loss now. In this case, don’t hold onto the hope of “waiting for a rebound,” but rather reduce or even clear your positions—because what you hold is essentially the “risk tail” after the previous rise. During short-term oscillations, unrealized losses may further increase. Especially for leveraged products like gold stocks and futures, leverage amplifies volatility, and further declines could lead to bigger losses.
Situation 2: accumulating at a low level (e.g., bought before 2025, with costs much lower than current prices after the correction)—recommend holding without panic. If you entered early during the price rise and still have good unrealized gains, this correction is just short-term fluctuation. No need to rush to sell. The core value of gold is as an “asset anchor,” not a short-term speculation tool. If your initial purpose was long-term allocation and risk hedging, ignore short-term ups and downs and continue holding—just as Yang Delong, chief economist of Qianhai Open Source Fund, pointed out, this sharp correction is a result of rapid rise, but the core logic of long-term upward trend remains unchanged. Short-term fluctuations are normal “breaths” in a bull market.
Situation 3: holding physical gold (jewelry, gold bars)—view based on purpose. If it’s jewelry: it’s mainly a consumer item, not an investment asset. Gold price fluctuations have little impact unless you need to cash out urgently. Otherwise, don’t sell just because of a correction, as jewelry’s main function is wearing, not making money. If it’s investment gold bars: refer to the above cost basis logic—if bought at high levels, consider reducing; if bought at low levels, hold and possibly buy more during dips to average down, but avoid “all-in” at once.