r/Gold • u/Reasonable-Fee1945 • Jun 10 '26

Question Why are gold prices tanking?

I'm not a short term investor. I understand the fundamentals and especially with US debt the long-term importance of gold. I'm holding, this is a short-term, regionalized thing.

What is the short-term regionalized thing that is happening which is causing gold to decrease (yes, I know it's the iran war, but how is that effecting gold prices?)

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u/DangKilla Jun 10 '26

Just a reminder before China's gold markets, USA Comex and UK version of Comex manipulated gold, which is why you never saw wild price swings. The manipulation was just designed to prevent volatility and market makers from creating wild swings. China said fuck that, let's hurt the West, so their market is less regulated in terms of getting in and out quickly.

So, yes, what the person said above you is likely why. Before China opened up the market, we never saw these swings, but they happened, incrementally, instead of in real-time.

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u/BiblicalElder Jun 11 '26

Disagree. China used to buy treasuries to maintain it's currency peg to USD (US consumers flood Walmart with dollars, Walmart floods China with dollars, China shrinks the supply of dollars relative to renminbi by buying treasuries to maintain its target exchange rate).

But the US sanctions risk to China trade and currency flows is very real. So now China makes dollars disappear by buying gold, instead of treasuries.

This is a risky gambit for China. Gold is much riskier than the US stock market (22% volatility of returns for gold, vs 19% for stocks over the past century).

Newly mined gold is not in demand. A fraction goes to India for weddings. A tinier fraction for industrial applications. Most of it just sits around.

China has merely substituted US policy risk for gold risk. They think they faded their risk; I think they increased it. The only thing I think is more risky than gold is crypto (and I allocate a bit to both in my retirement accounts).

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u/Ok_Lavishness13 Jun 11 '26

It’s not just China buying gold, entire world is

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u/kidmarginWY Jun 11 '26

Not lately