Gold price fell below $4,200, what's your view on this round of correction?

Recently, international gold prices have experienced a significant decline, with the spot price of London Gold once falling below the $4,200 per ounce mark. Short-term market volatility has increased notably. Faced with such market conditions, many investors are having doubts: Are assets like gold and gold mining still worth holding? Should one buy or sell now? (Data source: wind, as of March 23, 2026)

1. Why is the gold price under short-term pressure?

Looking at the reasons behind the volatility, the Federal Reserve's March FOMC meeting decision was the direct trigger for this round of gold price adjustment. The meeting clearly maintained the target range for the federal funds rate unchanged at 3.50%-3.75%. Due to rising oil prices from Middle East geopolitical conflicts and heightened inflation rebound risks, the Fed was forced to delay the interest rate cut process. This statement shattered the market's previous optimistic expectations for rapid rate cuts in the first half of the year. Additionally, under the influence of related geopolitical situations, short-term safe-haven funds have flowed into the US dollar, combined with some liquidity needs, collectively amplifying the volatility of gold prices.

2. Has the underlying logic supporting gold changed?

In the short term, market sentiment and capital flows dominate price fluctuations. However, from a medium- to long-term perspective, the fundamental value logic of gold has not been broken:

1. The trend towards diversification of the global monetary system continues, with central banks worldwide persistently increasing their gold holdings. The de-dollarization process has not reversed.

2. Global debt pressure remains high. As an asset free from sovereign credit risk, gold's safe-haven property remains scarce.

3. Geopolitical uncertainty has become normalized. Gold still plays the crucial role of a "ballast" in asset portfolios.

In other words, the factors causing the recent gold price correction are more about the correction of market expectations and disturbances in capital flows, and have not shaken the fundamental logic for gold's long-term allocation.

3. How should one respond at present?

Faced with short-term volatility, what investors need most is to remain rational.

1. Don't blindly follow short-term rises and falls: Market sentiment is often amplified during extreme market conditions. Chasing rallies and selling on dips can easily lead to substantial losses. It is advisable to view it from a long-term perspective.

2. Return to your own allocation needs: Ask yourself, what was the original intention of allocating to gold-related assets? Was it to hedge risks, diversify assets, or as part of long-term savings? As long as the underlying logic remains unchanged, short-term fluctuations do not alter its allocation value.

3. Avoid reckless operations: In a market environment where divergences are intensifying, frequent trading often backfires. Waiting for market sentiment to return to rationality might be a more prudent choice.

Volatility in financial markets is the norm. What truly navigates through cycles is never the precise capture of every fluctuation, but a deep understanding of the essence of assets.