Qi Lu Wan Bao Wang·2025-10-22 13:34Core Viewpoint - The recent sharp decline in gold prices has triggered significant reactions in the market, affecting both stock prices of gold-related companies and consumer behavior in the retail gold market [2][3][4]. Market Reaction - On October 22, A-share gold stocks experienced a collective drop, with companies like Hunan Silver and Shengda Resources hitting the daily limit down, while others like Xiaocheng Technology and Zhaojin Gold fell over 9% [3]. - The precious metals sector became the largest declining sector in A-shares that day, with the three major indices collectively falling and trading volume decreasing by 202.4 billion yuan compared to the previous day [3]. Retail Market Adjustment - The domestic gold retail market saw a significant adjustment, with major jewelry brands reducing their gold prices sharply. For instance, Chow Tai Fook's gold price dropped by 57 yuan to 1235 yuan per gram, while Lao Miao Gold saw a decrease of 83 yuan to 1211 yuan per gram [3]. - Despite the price drop, there was an increase in consumer purchases, with many taking advantage of lower prices to buy gold jewelry [4]. Factors Behind Price Drop - Analysts attribute the recent volatility in gold prices to a combination of technical corrections after a rapid increase, easing geopolitical tensions in Eastern Europe, and potential resolutions to the U.S. government shutdown crisis [5]. - The rapid rise in gold prices had created an overheated market, leading to profit-taking by institutions, which further accelerated the price decline [5]. Long-term Outlook - Despite the short-term price drop, several international investment banks remain optimistic about the future of gold prices. HSBC forecasts that gold's upward momentum could continue until 2026, with a target price of $5000 per ounce [6]. - Long-term bullish sentiment on gold remains intact, driven by concerns over U.S. fiscal deficits and the weakening of the dollar, positioning gold as a hedge against these risks [6].