Spot precious metals plunged on January 30, triggering a sharp sell-off across Chinese markets. Spot gold tumbled as much as nearly 5% before trimming losses to 3.92%, slipping below $5,200 per ounce at the trough. Spot silver fell about 7% intraday and was down 4.94% to $110 per ounce at the time of reporting.
The rout translated swiftly into China’s equity markets, where the A‑share precious‑metals complex opened substantially lower. Several producers and suppliers hit regulatory limit‑down levels: Xiaocheng Technology plunged more than 15%, while Sichuan Gold, Zhaojin Gold and Hunan Silver were among those sealed at daily down limits. Larger names such as Zhongjin Gold, Shandong Gold and Zijin Mining also recorded heavy declines.
Pressure spread beyond gold and silver to base and nonferrous metals, with entire segments moving lower on heavy volumes. A “white silver nonferrous” security was locked at the down limit with 1.37 million hands (lots) trapped at the price cap, and companies including Xingye Silver & Tin, Yuguang Gold & Lead and Zinc Industry Co. also hit limit down. The breadth and steepness of the falls point to a liquidity‑driven episode as much as to a change in fundamental demand.
The move immediately fed into the retail market: several domestic jewellery brands announced large price cuts in on‑shore pure‑gold (足金) jewellery. Chow Sang Sang quoted 1,662 yuan/gram, Chow Tai Fook 1,685 yuan/gram, Lao Feng Xiang 1,620 yuan/gram and Lao Miao 1,668 yuan/gram after their intraday adjustments, signaling rapid pass‑through from wholesale prices to consumer tags.
Why this matters: precious metals are both an asset class and a deeply embedded cultural store of value in China. Sharp swings compress margins for miners, threaten revenue for metals processors, and prompt immediate changes in retail pricing that influence household consumption and sentiment. For financial markets, the episode amplifies stress in leveraged positions and algorithmic flows, risking knock‑on effects in correlated commodity and commodity‑linked equity markets.
The near‑term outlook is for continued volatility. Investors will watch global drivers — US dollar and Treasury yields, Federal Reserve guidance, and ETF flows — alongside domestic indicators such as renminbi moves and onshore futures prices. Policymakers and market participants will also monitor whether this is a correction that restores valuation discipline or the beginning of a more protracted re‑ranking of precious‑metals risk in portfolios.