On October 23, gold prices continued to decline. As of press time, international gold prices saw spot gold in London drop 0.18% to $4,015.873 per ounce, with a year-to-date decline of over 7%; COMEX gold fell 0.81% to $4,027.5 per ounce, with a year-to-date decline of over 10%. Domestically, SHFE gold (Shanghai gold) dropped 2.42% to 864.94 yuan per gram, with a year-to-date decline of nearly 13%.
In terms of gold jewelry, data showed that on October 23, Laomiao Gold quoted 1,208 yuan per gram, down 25 yuan from the previous day; Chow Sang Sang quoted 1,206 yuan per gram, down 30 yuan; Chow Tai Fook quoted 1,208 yuan per gram, down 29 yuan; Lao Feng Xiang quoted 1,212 yuan per gram, down 24 yuan. Taking Laomiao Gold's quote as an example, as of October 23, its gold jewelry price per gram had fallen 498 yuan from the year's high of 1,706 yuan per gram, a drop of 29.19%.
Why has gold been falling frequently recently? Zhang Pengyuan, a researcher at Shenzhen Paipaiwang Fund Sales Co., Ltd., told reporters: "The recent pullback in gold is mainly due to high interest rate suppression. The Federal Reserve raised rates in September, and as a non-yielding asset, gold's holding opportunity cost has risen accordingly. At the same time, rising oil prices have created a reverse drag on gold: escalating Middle East conflicts have pushed up Brent crude, and the market worries about energy costs transmitting to inflation, weakening gold's safe-haven buying. In addition, after gold fell below $4,100 per ounce, short-term long stop-losses and algorithmic selling combined to further amplify volatility."
"This round of gold price decline is mainly pressured by changes in interest rate expectations," said Wang Zheng, general manager of Beijing Shangyi Private Fund Management Co., Ltd., in an analysis. Rising oil prices have intensified inflation concerns, and market expectations for the Fed to maintain high rates or even raise them have strengthened. The previously stronger dollar and US Treasury yields have weakened gold's appeal. Data showed that since late September, the dollar index has remained above 100, hitting a high of 102.9455 on October 14 and recently fluctuating around 101. As of October 22, the 10-year and 2-year US Treasury yields stood at 4.96% and 4.65%, respectively. In terms of oil prices, Brent crude has recently risen, breaking through $114 per barrel during intraday trading on October 23.
"High interest rates will continue to suppress gold's upside potential." Zixin Tianfeng Futures noted in an analysis, "In October, the Fed is likely to take a 'hawkish hold.' But by December, if inflation does not improve significantly (high oil prices transmitting to services and goods), the risk of consecutive rate hikes after December increases, the downward trend in US Treasury yields will be constrained, and the interest rate logic will suppress gold from rising."
Currently, international gold prices are still fluctuating around $4,000 per ounce. Will they fall further? Wang Zheng believes that whether international gold prices can form support at $4,000 per ounce depends on actual buying. The round number itself does not mean the decline is over. Central bank gold purchases and reserve diversification needs still help support medium- to long-term gold prices, but in the short term, they cannot fully offset interest rate pressure. If the dollar and US Treasury yields stabilize later, gold prices will have more conditions to stabilize. Before that, repeated bottom-testing should still be guarded against.
"On the downside, $4,000 per ounce is a key psychological threshold," Zhang Pengyuan said. "If it breaks below this level, international gold prices may further decline to around $3,830."
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