In early trading on March 16, London spot gold experienced a rapid plunge, breaking below the $5,000 mark to hit an intraday low of $4,966, a decline of 1.04%. During the same period, silver also briefly fell below $80.

As of press time, London gold was trading at $4,993.15 per ounce, down 0.5%.

On the domestic front, the price of AU9999 on the Shanghai Gold Exchange retreated. A query by Jiemian News on March 16 regarding pure gold jewelry prices from major brands revealed a general decline in retail prices to approximately 1,550 yuan/gram. Specifically, Chow Tai Fook quoted 1,557 yuan/gram, Chow Sang Sang quoted 1,547 yuan/gram, and Lao Miao Gold quoted 1,552 yuan/gram, all showing declines compared to the previous day.

Analysts state that the core factor triggering this round of decline is the upcoming Federal Reserve Open Market Committee (FOMC) meeting, with the session on March 19 being the focus of the week. Gold prices had previously risen significantly, accumulating a large amount of short-term profit-taking capital. Ahead of the critical meeting, some funds chose to exit and adopt a wait-and-see approach, leading to increased selling pressure.

The FOMC meeting is the core venue where the committee determines U.S. monetary policy, with the primary task of balancing economic growth and inflation through interest rate adjustments. Market attention is shifting to the probability of a rate cut in June and the frequency of cuts within the year; any deviation in signals could trigger a single-day surge or plunge in gold prices exceeding $50.

On the news front, U.S. and Israeli military operations against Iran continue, with no signs of tension easing in the Middle East. On March 16, according to CCTV News, reporters learned that the Israel Defense Forces (IDF) claimed early on the 16th to have launched large-scale strikes on facilities in the Iranian capital, Tehran; explosions were heard in the city. Simultaneously, the Israeli military stated it detected missiles launched by Iran and was conducting interceptions. Air raid sirens sounded across multiple locations in central Israel.

Additionally, according to a Xinhua News Agency report, U.S. President Trump threatened in a telephone interview with the Financial Times on the 15th that if NATO allies do not take action to assist the United States in keeping the Strait of Hormuz open, NATO will face a "very bad" future.

On March 13, the World Gold Council announced that in January 2026, global central banks' cumulative net gold purchases reached 5 tons. Compared to the 2025 monthly average of 27 tons, the buying momentum at the beginning of 2026 has slowed. Influenced by gold price volatility and holiday factors, some central banks may have paused their purchasing pace. However, with almost no signs of geopolitical tensions easing, it is highly likely that central banks will continue to increase their gold holdings in 2026 and over the longer term.

Although short-term gold prices are volatile, institutions remain bullish on the long-term trend. Morgan Stanley believes that if geopolitical tensions persist, gold prices are expected to "potentially reach $5,700 per ounce" in the second half of this year. Huachuang Securities is also optimistic about the long-term performance of gold prices, noting that gold has entered a super cycle, central bank buying demand is continuously strengthening, and safe-haven and investment demand may persist for the long term.

Goldman Sachs, in its latest research report, substantially raised its gold price forecast, lifting the December 2026 prediction from the previous $4,900/oz to $5,400/oz, an increase of over 10%. Goldman Sachs believes that the private investment sector is accelerating its allocation to gold, which may become a key force driving prices beyond expectations. Among the factors, emerging market central banks are continuing reserve diversification adjustments, with monthly purchases expected to reach 60 tons in 2026, contributing 14 percentage points to the rise; a 50 basis point rate cut by the Federal Reserve in 2026 will drive up Western gold ETF holdings, contributing a 3 percentage point rise; and macro policy risks such as global fiscal sustainability are unlikely to be fully eliminated in the short term, keeping related hedging demand stable and supporting gold prices at high levels.

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