On October 10th, spot gold showed an intraday rebound, with the current gold price hovering around $2,615 per ounce, reversing the continuous downward trend of several days. However, looking at the overall situation this year, the gold price continues to operate at a high level.

Under the high gold prices, a "loss account" for buying gold is being clearly calculated by the current generation of young people. What to buy? Where to buy? How to buy? They are keen to share their purchasing experiences and insights on social media, and the Shenzhen Shuibei market, where gold prices are relatively affordable, has already been filled with young people from all over the country.

"The gold bars are still on the way, and the gold price has fallen."

On October 9th, Shanghai citizen Xiaomi (a pseudonym) opened the bank's APP and saw that the two 5-gram gold bars he ordered on October 8th were still on the way, and the international gold price had fallen again. She told the reporter from Trend News that she was secretly happy about the "gold price drop, picking up gold bars" when she placed the order, but she didn't expect that the gold bars hadn't even reached her hands yet and had already broken even.

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Xiaomi shared her experience of "being trapped in buying gold" on social platforms, which resonated with many young people. In the past half month, as international gold prices have continued to fall, more and more young people have posted their orders to mock themselves as "big victims of buying gold," with the gold in their hands not even warmed up yet and already discounted.

"I never thought that after buying gold for 6 days, the gold price would fall every day," said Zhang Wei (a pseudonym), a citizen of Shaoxing, Zhejiang. During the National Day holiday, he went to the Shenzhen Shuibei International Jewelry Trade Center (hereinafter referred to as Shenzhen Shuibei) to buy gold jewelry at a price of 607 yuan/gram, but he firmly stood at a high level.

The gold jewelry selected by Zhang Wei. Photo source: Provided by the interviewee.

On that day, Zhang Wei carefully selected gold bracelets, bracelets, and rings, totaling about 35 grams, costing a total of 21,683 yuan. He told the reporter from Trend News that according to the selling price of gold jewelry at 591 yuan/gram in the Shenzhen Shuibei market on October 10th, he has currently lost nearly 20 yuan per gram, especially on October 8th, when the gold price plummeted by 10 yuan/gram, which has increasingly intensified his concerns about the continuous decline in gold prices.

In fact, there are no shortage of gold jewelry consumers like Zhang Wei. During the National Day holiday, the Shenzhen Shuibei market was bustling with people, and young customers were constantly coming and going. On the same day, a couple from Heilongjiang who were shopping in the store at the same time as Zhang Wei also spent 100,000 yuan on gold jewelry.

Shenzhen Shuibei Market. Photo source: Provided by the interviewee.Since the beginning of this year, international gold prices have been on an upward trajectory, with an increase of about 30%. The surging gold prices are increasingly gaining the attention of young people. Some interviewees believe that "buying gold is not consumption," and although the international gold prices are fluctuating, they do not expect a cliff-like drop in the short term. "Buying gold with a long-term perspective is an investment."

At the same time, young people buying the traditional "three golds" for marriage are starting to wait and see. Zhang Wei, who was in Shenzhen's Shuibei, had already planned to come back before his wedding to buy the "three golds." "With such high gold prices, I dare not buy everything at once," he told the reporter from Chao News. His wedding is next year, and he still has time to observe the trend of gold prices. "If the gold price continues to rise, I can take the gold jewelry that my parents bought at two to three hundred yuan per gram to the store for an exchange. This is also a form of inheritance."

Chen Li (a pseudonym), a citizen of Jiangsu who is about to get married, is also worried about the high gold prices. She told the Chao News reporter, "My parents transferred 80,000 yuan to me, and I have been waiting for several months without placing an order. I regretted not taking the plunge a few months ago, and now I am worried that the gold price will drop too quickly, so I dare not buy."

Some young people also said that the gold price is still at a high level, and it is not suitable to stock up on gold at present, so they mainly wait and see. If the gold price stops falling and rises again, they consider reducing "five metals" to "three metals," just enough for the wedding. Some young people also choose "three metals" as daily low-gram models to minimize the cost of buying gold.

In an interview, the owner of a goldsmith shop on Hangzhou Stadium Road introduced to the Chao News reporter that after buying gold bars from the bank, finding a goldsmith shop to "make three metals" is cost-effective. Taking a 50-gram "three metals" gold jewelry as an example, the goldsmith shop saves the gold brand premium and only charges a processing fee, which can save about 9,500 yuan. Therefore, in the past, most of the people who came to the goldsmith were middle-aged and elderly, but now there are no lack of young people.

Expert advice: Gold jewelry consumption can be observed until the Spring Festival.

Recently, after the gold price reached the highest point in history on September 26, it has been in a fluctuating downtrend. On October 9, the spot gold closed down by 14.13 US dollars, a drop of 0.54%, at 2607.71 US dollars per ounce, which has been falling for six consecutive days. On October 10, the spot gold price fluctuated slightly upward.

Spot gold trading price. Image source: Webpage screenshot.

"The recent international gold price has approached the threshold of 2,700 US dollars per ounce, and the slowdown in the Federal Reserve's interest rate reduction pace may lead to a strong rebound of the US dollar, so adjustments are also very normal." Li Gang, the research director of the China Foreign Exchange Investment Research Institute, told the reporter from Chao News.

Federal Reserve Chairman Powell. Image source: Interviewee's photo.On the early morning of October 10th Beijing time, the Federal Reserve released the minutes of its latest interest rate meeting. The minutes revealed that there was significant internal disagreement over the 50 basis point rate cut in September.

In terms of the subsequent path of rate cuts, the minutes continued the Fed's usual ambiguous approach. The minutes merely stated that if inflation continues to decline towards the Fed's 2% policy target, and employment maintains its recent expansionary trend, adopting a more neutral stance over time may be appropriate.

"Currently, the capital market feels that the two Fed rate cuts in November and December may not be as direct as the last 50 basis point cut, and there is a possibility of further slowing down, which could further lead to a rebound in the US dollar," Li Gang said, noting that the temporary decline in gold prices should not have ended yet, as it is still at the short-term level and has not reached the medium-term adjustment level.

However, Li Gang believes that there is still room for international gold prices to rise. "Now there is a certain degree of uncertainty in various policies and geopolitics. People's fear of risk will trigger a risk-avoiding sentiment, which will push up international gold prices."

For example, in the Middle East, Israeli Prime Minister Netanyahu promised that his archenemy Iran would pay a price for its missile attacks, while Tehran stated that any retaliation would be met with massive destruction. This has sparked concerns about a larger-scale war breaking out in the oil-producing region, potentially involving the United States.

However, looking to the future, Li Gang said that one should still view the future international gold prices with a positive attitude. It is highly likely that the price will rise to $2,700 per ounce, and it may even reach $2,800 per ounce.

Shenzhen Shuibei merchants display gold bars. Photo provided by the interviewee.

Li Gang said that for consumers, if gold is considered as an investment, one can still buy firmly. However, if it is for jewelry consumption, one should still adhere to the principle of "cash is king." Considering the overall economic environment, it may be better to make plans around the Spring Festival.

ShenYin & WanGuo Futures Research Report believes that previously, due to the escalation of conflicts in the Middle East, the Fed's rate cut exceeded expectations, and the prices of gold and silver once continued to strengthen. However, considering that after the first rate cut, the market's expectation of easing reached a short-term high, the Fed will enter a discretionary stage. The current monetary policy goal is to "return to a neutral interest rate rather than" a significant easing rate cut. If the fundamentals do not have a basis for a rapid rate cut in the future, under the expectation of a "soft landing," the current long positions are also quite crowded, and the overall price has reached the expected price of the market last year. The performance of gold in the fourth quarter may be relatively struggling compared to previous performances.