Spot gold falls below $4,600 per ounce, A-shares and H-shares with gold concepts continue to weaken in the afternoon.

Why does geopolitical tension cause gold’s safe-haven properties to fail?

On April 2, in the afternoon, the A-share gold sector continued to weaken. Individual stocks generally fell, including Chengtong Technology down nearly 8%, Hunan Gold and Zhaojin Gold down more than 5%, and ST Cuihua, Sichuan Gold, Western Gold, and others also fell in line.

In the Hong Kong stock market, in the afternoon, the gold concept fell noticeably. Tanjin Mining and Long Resources both dropped by more than 6%, Zhufeng Gold fell by nearly 6%, and Tongguan Gold fell by nearly 5%.

On the news front, spot gold fell and broke below 4600 dollars per ounce, and spot silver fell and broke below 71 dollars per ounce.

On Thursday morning Beijing time, as U.S. President Trump delivered a nationwide address, global financial markets were shaken: Asia-Pacific equities fell, the U.S. dollar strengthened, and oil prices surged. Trump’s speech shattered investors’ expectations for a rapid ceasefire between the U.S. and Iran.

According to reports from media including CCTV News, on the evening of April 1 local time, Trump delivered a speech in which he claimed that the Iran conflict had achieved a “rapid, decisive, overwhelming victory” on his own initiative. The U.S.’s core strategic goal in the Iran conflict was “close to completion.”

Trump also said that in the next few weeks, the U.S. would carry out stronger firepower strikes against Iran. He also threatened that if an agreement could not be reached, the U.S. would carry out fierce attacks on all of Iran’s power plants”.

Recently, there has also been disagreement among institutions about their views on gold.

UBS (UBS) precious metals strategist Joni Teves recently warned that if the Iran conflict lasts longer and oil prices remain high, this round of gold’s rally could end soon. She explained in a recent interview that the market currently expects the Federal Reserve to keep interest rates unchanged this year, which means there is less likelihood for gold prices to rise. “We believe the gold cycle should be broadly synchronized with the Federal Reserve cycle, so we expect that by the end of this year this (upward) trend will gradually weaken, and in the coming few years, prices will consolidate at lower levels.” She added. According to Teves, during periods of market volatility, as traders flock to safe-haven assets, gold prices during the conflict often rise, but gold prices usually have an inverse relationship with Federal Reserve interest rates—when the central bank decides to cut rates, gold prices rise. Currently, UBS’s year-end gold target price remains at 5600 dollars per ounce.

Goldman Sachs is still bullish on gold and expects the gold price to reach 5400 dollars by the end of the year. Despite the recent drop in gold prices, Goldman Sachs Group still maintains its bullish view on gold and predicts that the rally will resume again before the end of 2026. In their report, analysts Lina Thomas and Daan Struyven said that gold’s medium-term outlook remains solid, and the gold price could reach 5400 dollars per ounce, citing as main reasons that central banks continue to buy and the U.S. is expected to cut interest rates two more times this year. They said that in the short term, gold still faces “tactical downside risk,” and if energy supply shocks intensify, gold prices could fall to 3800 dollars per ounce.

Cinda Securities said that therefore, overall, geopolitical conflict will still be the most core variable in the short term, and there are currently no signs of material easing. Instead, the market is being repeatedly disrupted in the back-and-forth between hopes for de-escalation and renewed escalation. Against this backdrop, oil prices will most likely remain at high levels, exerting a sustained but unstable impact on gold. At the same time, the market’s pricing of the Federal Reserve’s policy path will also be adjusted back and forth, leaving gold prices without a clear direction. Therefore, in the short term, market moves will still be mainly driven by news, with rapid switches in direction and weaker trend continuity. Once there are clear signals of conflict escalation or de-escalation, prices may see rapid one-way volatility. In this environment, it is more important to focus on the timing rather than the direction—avoid chasing rallies or selling in panic during sentiment swings, and wait for clearer macro or event signals before making allocations.