Gold prices plummeted. Has gold investment managed to hold up?

Since March, international gold prices have continued to decline sharply, with a monthly drop of over 15% and a maximum drawdown of more than 24%. How have the previously popular gold investment products performed during this rapid decline?

Researcher Wang Haoyu from the Ji’an Jinxin Fund Evaluation Center said that since March, the rapid adjustment in international gold prices has created the largest weekly decline in nearly 40 years, directly impacting bank financial products related to gold. In terms of net value performance, products that use gold as part of a “Fixed Income+” yield enhancement strategy typically have a gold allocation ratio of 5%–15%, making their overall drawdowns relatively controllable. However, some products have a higher gold allocation, even structured products with leverage, which can be highly volatile.

Looking at specific performance, according to the latest data from Puyi Standard on March 25, the rapid correction in international gold prices has indeed impacted bank financial products combined with gold. However, the short-term net value performance of “Fixed Income+” and structured financial products has shown clear divergence: among 30 “Fixed Income+” products with returns, nearly 70% had a negative 7-day annualized yield, and nearly 70% experienced net value declines; among 47 structured products with returns, over 90% maintained positive returns above 1%, and there were no declines in the past month.

Researcher Cui Shengyue from Puyi Standard pointed out that this difference mainly stems from the mechanisms of these two types of products. “Fixed Income+” products are more directly affected by gold prices because they typically allocate directly to gold ETFs, gold stock ETFs, or physical gold, so fluctuations in gold prices are more directly transmitted to the product’s net value. In contrast, structured products often indirectly allocate gold through derivatives like options. Losses in options are mostly limited to the premium paid, and with reasonable position control, the fixed income from the core holdings can provide some buffer, diluting the impact of gold price declines. Additionally, some products’ option structures are designed to limit the impact of gold price volatility on returns.

It is worth noting that despite the sharp decline in gold prices, the issuance volume of gold-linked financial products has not significantly decreased since March.

Regarding new issuances, Cui Shengyue pointed out that, according to data from Puyi Standard, more than 10 related products were newly issued in March. Although this is a decline compared to January and February, over a longer period, this level has not reached a historical low, reflecting that financial institutions have generally maintained a relatively stable pace of gold-themed product supply amid market volatility.

Wang Haoyu believes that gold, as a major asset class, has not changed its strategic allocation position despite this round of sharp price drops. He sees gold as an asset for hedging long-term inflation and diversifying portfolio volatility. Its low correlation with stocks and bonds means its value in strategic allocation has not disappeared. In the current market environment, it is more about tactical adjustments to allocation weights.

Cui Shengyue also pointed out that the overall trend of “Fixed Income+ Gold” products is becoming more stable and diversified. The structural designs are more varied, with mechanisms like “take-profit targets” helping investors lock in gains and improve holding experiences. Additionally, the introduction of structures like “shark fin options” and binary options enriches the ways to generate returns and buffer risks.

In terms of risk control, Wang Haoyu further stated that bank wealth management companies have generally tightened risk management rules for gold assets. They may respond to volatility by reducing holdings or optimizing hedging strategies.