Gold bars sold out? What’s different about this round of gold purchases?

Recently, gold price trends have continued to attract attention. In early November, spot gold in London once fell to around US$3,900 per ounce, down nearly 30% from the year's high. At the same time, topics such as "Why do gold stores have no stock to sell when gold prices fall?" became hot searches, and gold stores in many places sold out of investment gold bars. Why has the price of gold dropped significantly this year? What is the difference in gold purchase demand this round? Let’s take a look↓

Q: Why has the price of gold dropped significantly?

Answer: This round of decline is the result of multiple factors.

The primary variable comes from the Federal Reserve, whose policy orientation has shifted to tightening since the third quarter. Affected by this, gold prices accelerated their decline in late October. The U.S. non-farm payrolls announced on November 6th increased by 165,000 in October, far exceeding previous expectations. Therefore, market expectations for the Federal Reserve to raise interest rates in December have subsequently increased, continuing to affect the trend of the gold market.

Secondly, geopolitical conflicts in the Middle East have pushed up oil prices, and the imported inflationary pressure faced by the United States has increased, which has strengthened expectations of the Federal Reserve raising interest rates, further suppressing gold prices.

Finally, at the trading level, the price of gold was at a high level at the beginning of this year, and a large number of investors took profits. In addition, the stock prices of U.S. technology stocks fell back, and some institutions also resorted to selling gold to relieve liquidity pressure.

Q: What is the current sales situation of investment gold bars on the market?

Answer: The reporter learned at the Beijing Caibai Main Store that in early November, investment gold bars under 30 grams were sold out offline, and multiple specifications from 20 grams to 200 grams were also out of stock online. At present, the overall gold retail market is in a tight spot supply situation, the supply of gold bars of popular specifications is unstable, and the shortage situation continues.

The shortage of investment gold bars is due to the fact that the quotations of some investment gold bars once fell to more than 800 yuan per gram. Compared with gold jewelry, the price difference is strong. In addition, the light weight thresholds of 5 grams, 10 grams, and 20 grams are low. Coupled with the "Double Eleven" promotion and year-end stocking, purchasing power flocked to the same batch of specifications in a short period of time.

From the supply side, most merchants replenish orders in small batches and do not double their inventory due to falling prices, which has also led to the current temporary supply shortage in the market.

Q: How is this round of gold purchases different from the past?

Answer: This round of market conditions has shown obvious differentiation characteristics. Investment in gold bars has ushered in concentrated allocation by investors. Only some weddings in the gold jewelry sector need support, and the overall national jewelry consumption has weakened.

A survey by the World Gold Council shows that the proportion of retailers who prefer light weight products below 10 grams has increased compared with last year. Overall, buying gold is being used by more people as an asset allocation option, and the financial demand for buying gold has increased significantly. However, the price of gold fluctuates greatly, and consumers need to make rational purchases based on their actual needs and risk tolerance, and do not need to blindly follow the trend.