Why do they fall
"the price of gold is nine, and it's so hard."
As one of the most stable “rivers of risk”, the robust properties of gold have failed. Since 5 june, when the gold price suddenly turned down at a high level of $4353, the market panic has been greatly amplified in four to five trading days, not only by successive attacks at critical psychological levels such as $4,300 and $4,200, but also by a total of $4,100 from 10 to 11 june。
According to wang hong ying, president of the financial derivatives and investment institute of china (hong kong), china newsweek, the price of the round jumped from a high of $5626. 8 at the beginning of the year, and on 11 june it fell at the $4,100 threshold, with the core of repression coming from inflation in the united states and the expected reversal of fed policy。
The senior deputy director-general of the eastern kincheng research and development department, zhui, further analysed china newsweek, and a series of recent united states economic data were comprehensive “explosive tables”. Whether ism manufacturing and service pmi or jolts job openings, adp and non-farm employment data, they are well above market expectations。
“gold as an interest-free asset, holding opportunity costs have increased dramatically, folding up the previous period's continuing surge in large-scale profit pools, the technology itself has a need for substantial adjustments, and multiple space resonances have led to rapid declines.” wang hong ying said。
This has led to a short-term and complete suppression of interest-rate logic by the geohazard support of gold, and has also contributed to the short-term failure of the principle of “discretionary buying gold”。
The strong performance of the united states economy, added, directly ignited the expectations of the market for the fed’s interest rate hike and pushed the dollar index up significantly. At the same time, spacex's listings absorb significant amounts of money, causing a phased diversion of precious metals markets。
On the technical side, the release of the key signal that the technical cattle market trend, which has been defined as a “phase end” in the logic of quantitative algorithms, has been effectively collected for the first time since september 2023 under the 200-day mobile average, has triggered a chain reaction of quantitative losses, declining trend funds and leveraging funds。
The combination of gold consumption and investment, on the other hand, leads to widespread chain reactions。
At the end of the investment, the downside in gold prices can directly reduce the profits of the mining companies, leading to a pressure on the relevant stocks and derivatives and causing the flow of funds out of the gold market; and at the end of the consumption, while the downside in gold prices may stimulate the purchase of some gold in the short term, it is also very likely to trigger a “buy up or fall” outlook。
With the marked fall in gold prices, the gold stock has also fallen. As at 10 june, the ssh gold stock index, which tracks gold companies in both locations, was once at a new low of 2652. 84 points during the year。
The depth of the head gold unit in terms of the a unit specifics is clear: hundreds of billions of dragon head shandong gold has retreated by more than 50 per cent since the high point of the year; hunan silver's largest retreat has been nearly 56 per cent, with more core markers close to “fast-cut”; and the coloured dragon head purple mining also fell by more than 10 per cent during the year。
The public's view of gold products is also growing. According to the china gold association, the national consumption of gold jewellery in the first quarter of 2026 was 84. 62 tons, a significant drop of 37. 10 per cent over the same period, up from a high in recent years。
What do you think of the gold market
The pressure on gold is short-term or will continue。
An analysis of the financial situation shows that the market is currently marked by structural divisions. On the one hand, the world's largest spdr gold etf was significantly reduced by 9. 22 tons a week, reflecting a relatively weak willingness to buy a deal in the physical spot market; on the other hand, the cftc data indicate that there is still a proliferation of and a shortfall in financial institutions, suggesting that the futures end's allocation is still biased。
“in the medium term, if the fed's interest rate hikes are expected to continue to ferment and drive further increases in real interest rates, the price of gold will continue to face significant downward pressure.” (swiss judgement)。
Wang hong young shares the same view. In his view, inflation data, the fed's attitude remained the main pricing line in the short term, and there had been no substantial change in the current tight interest rate environment, and gold prices were still at the bottom of the shock adjustment phase。
Citigroup released an early warning study this week to lower the target price of gold for three months from $4,300 per ounce to $4,000, on the grounds that the stalemate in the strait of hormuz and high energy prices have raised the market’s expectations of an annual increase in the fed’s interest rate. At the same time, early warning was given that the blockade of the strait of hormuz would last until the end of the summer and that the price of gold would fall to $3,500 per ounce. This has been the second time in a single month that citigroup has changed its forecast of gold prices。
However, short-term anticipated repairs are not equivalent to the end of long-term cattle-market logic。
In the view of many of the experts interviewed, the structural bottom logic underpinning the price of gold has not wavered: the global de-dollarization process continues, america’s huge debt weakens dollar credit; the global central bank maintains a multi-year net-purchase tempo, and the central bank of china has long-term and sustained gold build-up, creating a rigid bottom-up force。
According to the world gold association, the share of gold in global official reserves rose to 27 per cent by the end of 2025, and anti-u. S. Debt became the first largest reserve asset; in the first quarter of 2026, global central bank net purchases amounted to about 244 tons, an increase of 17 per cent over the ring and above the five-year average. In the view of zheligers, this suggests that official sector gold purchases continue to underpin global demand for gold。
With this in mind, most institutions continue to believe that the logic of the gold structural cattle market has not been undermined, and the current wall street benchmark consensus for gold is roughly between $4,600 and $5,400 (end of 2026)。
“according geo-scrutinization, the sovereign avoidance of gold and the long-term value of inflation remain the same, and the price of gold is the basis for a return to the road once inflation in the united states is returned and interest rates are expected to recalibrate. The overall scene will not be the same as last year's increase in unilateral fanaticism, and the second half of the year is probably turning into a slow boom。
Based on this judgement, investors need to look rationally at current short-term fluctuations and adopt a more prudent strategy。
In response to current gold investments, wang hong kong proposes a differentiated response strategy: investors involved in leverage transactions such as gold futures, options, etc., must be risk-restricted and cut in time when prices are adjusted back to protect against the risk of bursting; for investors holding physical gold bars or non-leveraged cash gold, there is no need to be excessive panic and wait patiently for the market to stabilize key technology support such as $4,000/ounces, and moderate to a low layout. In general, discarding leverage and maintaining long-term configuration is a more prudent investment strategy at this time。
(no investment proposals are made here)
