Gold prices fluctuate at high levels, and supply of investment-grade physical gold products is tight.

Reporter: Peng Yan

Currently, the demand for gold consumption and investment continues to rise.

On March 6, the reporter visited several gold stores and learned that although gold prices are currently high, investment gold bars are selling well, with 10-20 gram products becoming the mainstream choice in the market.

In response to the popularity of offline gold stores, the supply of investment gold bars in some bank channels has also started to tighten. Recently, many banks’ online and offline channels for investment physical gold bars are generally in a state of “temporarily out of stock” or “sold out.”

The reporter logged into several bank apps and found that multiple investment physical gold products from some banks displayed “temporarily out of stock” or “sold out.” Among them, the Industrial and Commercial Bank of China’s app showed that its core product, “Ruyi Gold Bar,” is “temporarily out of stock.” This product is a physical gold issued by the Industrial and Commercial Bank of China with a purity of Au999.9, covering six specifications from 5 grams to 200 grams, with cumulative sales exceeding 1.92 million sets. The Agricultural Bank of China’s app also shows that investment gold bars are “out of stock.”

“The number of gold purchasers has significantly increased recently, mainly consisting of long-term investors, and small-weight investment gold products are in short supply,” a financial manager at a bank branch told the reporter. Currently, physical gold and accumulated gold are the main ways for investors to participate. In the context of increasing volatility in gold prices, he reminded investors to choose investment methods rationally and manage risks appropriately.

Another bank branch’s financial manager also stated that recently, there has been virtually no physical gold inventory at the branch, mainly due to a surge in demand from investors. “Currently, all the physical inventory at the branch needs to be transported from the branch headquarters, and there is basically no stock available for direct purchase at the branch,” said the financial manager.

Recently, international gold prices have shown increased volatility, maintaining a high-level oscillation pattern. On March 2, spot gold surged to $5,400 per ounce during trading, and on the evening of March 3, it briefly fell below the $5,000 per ounce mark. As of March 6, when the reporter was writing, spot gold had rebounded to $5,116.88 per ounce.

Qu Rui, senior deputy director of the Research and Development Department of Dongfang Jincheng, told the Securities Daily reporter that in the short term, gold prices will maintain high volatility, mainly due to the ongoing possibility of further escalation of geopolitical conflicts, which will provide upward momentum for gold prices. In the medium to long term, the restructuring of the international monetary order has become the main line of global assets, and against the backdrop of weakened dollar credit and increased fiscal risks in the U.S., the continuation of the Federal Reserve’s interest rate cut cycle will further reduce the opportunity cost of holding non-yielding gold. At the same time, the demand for gold purchases by global central banks remains high, and the continuous gold purchasing behavior of various countries due to strategic considerations resonates with the deepening trend of de-dollarization, collectively strengthening the long-term upward foundation of gold.

Multiple institutions hold an optimistic view on the medium to long-term performance of gold prices. Xinda Futures suggests that it is best to stay on the sidelines in the short term, while in the medium to long term, there may be upward space for gold prices, and one could buy on dips. Huaxi Securities predicts that gold prices may increase by 10%-35% by 2026.

In the face of rapid spikes and drops in gold prices and the market’s buying enthusiasm, industry experts remind that gold has both commodity and financial attributes, and with high-level volatility, price risks are rising. Investors should participate rationally, avoid blindly chasing highs, and ensure effective risk control and asset allocation.

Xue Hongyan, a special researcher at Su Shang Bank, told the Securities Daily reporter that current gold investment needs to be wary of multiple risks: first, price volatility risk; historically, gold has seen deep and prolonged retracements, and chasing highs in the short term may face pressure for high-level corrections; second, liquidity risk; under extreme market conditions, some channels may experience trading restrictions; third, as a non-yielding asset, gold plays more of a role in risk aversion and diversification in an asset portfolio, and excessive reliance on price differences for profit carries uncertainty.

He suggests that investors should maintain a medium to long-term allocation mindset rather than short-term speculation, viewing gold as a stabilizer in their asset portfolio; carefully assess their risk tolerance, and avoid blindly chasing price increases or decreases; employ a phased and diversified approach to allocation, closely monitor market changes, and manage positions in a timely manner.

(Edited by: Qian Xiaorui)

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