On the morning of February 3, before Beijing's Caibai store opened, customers clustered in two long lines: one to trade in gold for cash and another to buy investment gold bars. Staff had moved the buyback queue to another floor and deployed signs to keep order as footfall swelled ahead of the Lunar New Year.
Domestic spot gold in China was trading around ¥1,070–¥1,082 per gram while international quoted prices swung from a brief peak near $5,500 per ounce to about $4,700 in a matter of days, then staged a modest rebound to roughly $4,827. The sharp whipsaw in prices has turned what many Chinese households treat as a hedge into a short-term trading asset, prompting a wave of stop-loss selling and opportunistic re-entry.
Individual stories illustrated the split mood. One buyer who paid about ¥1,100 per gram planned to sell part of a 200-gram holding to “sleep easier,” while another investor who bought 20 grams at ¥1,000.40 in January calculated a one-month profit of around ¥1,540 after fees at current prices. Experienced retail traders, like a woman who had bought at ¥800 and sold at ¥1,240 for a net gain of ¥8,800, described a follow-the-crowd logic: more sellers signal a buying opportunity.
Banks and gold retailers, however, urged caution. Industrial and Commercial Bank of China issued repeated consumer warnings in a single week, several banks tightened entry thresholds for gold investment products, and Caibai itself advised shoppers to treat recent volatility with prudence. Wealth managers such as UBS argued that structural drivers — policy noise, geopolitical risk and dollar dynamics — still support demand for physical gold, recommending risk-management tools such as options and stressing seasonality ahead of the Lunar New Year.
The episode matters because it exposes how retail flows amplify price moves in China’s heavily physical-focused gold market, where domestic premiums and strong seasonal demand can diverge from global paper markets. When large numbers of ordinary savers simultaneously try to realise gains or cut losses, trading can become self-reinforcing, raising the odds of deeper short-term dislocations and leaving inexperienced investors exposed to losses and liquidity squeezes.
Looking ahead, analysts expect continued volatility. Some banks set a potential floor near $4,500 an ounce, but they do not rule out deeper corrections if global risk-appetite shifts; the recommended response for most retail investors is to avoid leverage, consider dollar-cost averaging and treat physical gold as part of a longer-term asset-allocation strategy rather than a vehicle for short-term speculation.