China's Gold Sellers Cashed Out Ahead of $4,500 Price Crash

China's gold market experienced a sudden surge in sales before the recent price drop, as investors cashed out at the top. In the days leading up to Thursday night's plunge, gold buyback counters were busy with people selling their gold bars and bangles. The Shenyang Evening News reported that many investors had bought gold at around 800 yuan a gram during the year's climb and were now sitting on nearly 150 yuan of profit per gram.

The market confirmed these investors' instincts when spot gold closed down 2.95% overnight, breaking below $4,500 an ounce to $4,453.67. The trigger for this price drop was a speech by Fed chair Warsh at the Jackson Hole symposium. Gold prices briefly reached a record-adjacent $4,631.93 before sliding more than 3% into the close.

One gold shop in Hangzhou cut its recycling price four times in a single hour on Friday morning as the overnight slide worked its way to the counter. This repricing reflected the global market's reassessment of gold prices. Gold occupies a special place in Chinese household finance, serving as both savings and hedge.

The comments under the crash coverage split into two camps: those who sold their gold with relief and those who saw the falling price as an opportunity to buy more. Analysts treated the sell-off as ordinary profit-taking after an extraordinary run.