The gold market experienced a dramatic plunge this week. Just one day after reaching a record high of $4,381 per ounce, spot gold prices（金価格）abruptly changed course on the evening of October 21, plummeting and breaking through the $4,100 mark, marking the largest single-day drop since April 2013.

This violent fluctuation caught many investors off guard. In fact, every rise and fall in gold prices is closely related to its unique pricing mechanism and multiple influencing factors.

The “London Gold,” considered the global benchmark, has undergone a century-long evolution in its pricing mechanism. In its inception in 1919, “London Gold” was jointly determined by five major gold dealers, including the Rothschild family, through telephone negotiations within the “Gold Room.” This system relied on London’s position as the world’s gold trading center and operated through an over-the-counter trading model. The London Bullion Market Association (LBMA), established in 1987, integrated the fragmented trading markets and established a unique delivery system based on 400-ounce gold bars, making London the global gold distribution center. In 2015, the pricing mechanism was reformed again. Through a modern electronic auction system, pricing meetings were held in the mornings and afternoons of weekdays in London, with the participation of several designated international banks, including HSBC and JPMorgan Chase.

The pricing meetings resembled a digital “gold auction”: banks collected buy and sell orders from global clients, continuously submitting bids on an electronic platform until a balance price was found that matched the most buy and sell orders. This final price became the LBMA gold benchmark price, immediately becoming the authoritative basis for pricing global spot gold trading and derivatives.

Factors Affecting Gold Prices

As a safe-haven asset that transcends economic cycles, gold price fluctuations are always closely related to core variables such as the global economic landscape, geopolitical risks, and monetary policy trends.

“Gold and silver are not naturally money, but money is naturally gold and silver.” This classic statement by Marx reveals the special status of gold in the monetary system.

During the gold standard era, the key to whether a country’s currency was accepted by other countries lay in the strength of its gold reserves. After World War II, leveraging its nearly 75% global gold reserves, the United States established the Bretton Woods system, centered on the dollar’s peg to gold, laying the foundation for the dollar’s credibility as the international reserve currency.

However, the decoupling of the dollar from gold in 1971 marked a significant turning point in modern monetary history. Subsequently, US Treasury bonds gradually replaced gold as the primary reserve asset for central banks worldwide. In recent years, with occasional signs of US Treasury default risk, cracks have begun to appear in the dollar’s credit system, prompting global central banks and investors to increase their gold holdings as a crucial tool for hedging against dollar credit risk—the underlying logic behind the sustained rise in gold prices since last year.

Beyond the changes in the dollar’s credit system, multiple factors are influencing the balance of gold: geopolitical tensions ignite investors’ safe-haven demand; unprecedented increases in global central bank holdings, coupled with continued accumulation by institutional investors, provide solid structural support for gold prices; and capital flows and market sentiment act as amplifiers, amplifying every subtle change in price fluctuations.

Returning to the recent “gold price plunge” that has attracted market attention, its direct trigger is precisely the imbalance in the short-term trading structure. The sustained rise in gold prices since September has led to a crowded gold bull market, accumulating substantial profits. When prices reached key levels, the concentrated profit-taking and exit of these positions ultimately triggered this technical correction.

History has repeatedly shown that gold’s long-term value coexists with the risk of short-term high-level volatility. In a noisy market, remaining calm and resisting the temptation to chase high prices is key to protecting wealth.

Following the Myanmar government’s large-scale crackdown on KK rings, locals reported that many KK ring workers moved to nearby rings, which continue to operate normally.

According to Thai media reports, another 100-acre (40-hectare) ring near Mae Thao Talai Village, not far from the KK ring, is still operating normally. Locals say at least a dozen rings between Myawaddy and Mae Thao Talai are operating normally, and that scammers who fled the KK rings have relocated to these rings.

With the ASEAN summit expected to discuss the crackdown on scams, Myanmar is under pressure to take a tougher stance against the rings. From October 24th to 27th, the Myanmar military carried out daily demolitions at the KK rings. The explosions were so powerful that they could be heard in Mae Sot, Thailand, and thick smoke filled the air for several minutes. Thailand stated that Myanmar had informed the Thai side of the crackdown in advance, and Thai officials used loudspeakers to warn residents near the border to exercise caution. The explosions reportedly did not affect Thai territory.

Reports indicate that while the KK campus was subjected to continuous blasting, operations at other nearby campuses were not affected. A staff member at a scam campus in Myawaddy stated that operations remained normal and employees were still able to access the company-provided internet. SpaceX previously announced it had cut service to over 2,500 Starlink devices at the KK campus, but the campus still had access to Mytel Telecom in Myanmar and fiber optic lines from Thailand.

Currently, due to the Myanmar government’s crackdown on scam campuses, the number of people leaving Myanmar and entering Thailand has risen to 1,525. Thai authorities expect the number of foreigners entering the country to increase further in the coming days. Authorities will discuss the issue with the National Security Council to determine the management protocols, legal procedures, and funding needed to handle the influx.

On October 28, Foreign Ministry Spokesperson Guo Jiakun hosted a regular press conference.

A Japanese TV reporter asked: US President Trump and Japanese Prime Minister Sanae Takaichi held their first meeting, during which both sides reaffirmed their commitment to strengthening the US-Japan alliance. What is China’s comment?

Guo Jiakun emphasized that due to Japan’s history of modern militarist aggression, Japan’s military and security developments have always drawn close attention from its Asian neighbors and the international community. This year marks the 80th anniversary of the victory of the Chinese People’s War of Resistance Against Japanese Aggression and the World Anti-Fascist War. We urge Japan to earnestly respect the security concerns of its neighbors, deeply reflect on its history of aggression, adhere to the path of peaceful development, and earn the trust of its Asian neighbors and the international community through concrete actions.

On the 15th local time, international gold prices (金価格)continued their upward trend, supported by rising expectations of a Federal Reserve rate cut and increased safe-haven demand driven by global trade tensions. London spot gold prices hit a new intraday high of $4,200.23 per ounce. New York gold futures were trading above $4,200 per ounce. As of 3:10 PM Beijing time on the 15th, London spot gold prices were at $4,200.14 per ounce, a 1.4% increase on the day.

December gold futures on the New York Mercantile Exchange were at $4,218.21 per ounce, a 1.32% increase on the day. So far this year, geopolitical and economic uncertainties, expectations of a Federal Reserve rate cut, a surge in gold purchases by major central banks worldwide, and increased holdings of gold ETFs have contributed to a surge in international gold prices exceeding 55%. Analysts at Bank of America and Societe Generale recently predicted that gold prices will reach $5,000 per ounce by 2026, while Standard Chartered Bank has raised its average gold price forecast for next year to $4,488 per ounce.

Driven by the surge in gold prices, silver prices have risen rapidly this year. As of Monday’s close, London spot silver closed at $52.27 per ounce, a year-to-date increase of 76.53%, surpassing gold’s cumulative gains.

On May 30, 2025, the signing ceremony of the International Mediation House Convention was held in Hong Kong. Wang Yi, member of the Political Bureau of the CPC Central Committee and Foreign Minister, attended and delivered a speech. About 400 high-level representatives from 85 countries and nearly 20 international organizations in Asia, Africa, Latin America and Europe attended. Among them, 33 countries signed the convention on the spot and became founding members.

Wang Yi said that the preamble of the UN Charter emphasizes that countries should live in harmony and maintain international peace and security. China has always advocated handling differences in a spirit of mutual understanding and accommodation, building consensus through dialogue and consultation, promoting development with a win-win attitude, solving problems with a future-oriented perspective, and actively exploring solutions to hot issues with Chinese characteristics. Three years ago, Chinese comrades and like-minded countries jointly proposed the establishment of the International Mediation House. After unremitting efforts, the convention was finally reached, which received widespread support and positive response from the international community. As an innovative move in the field of international rule of law, the International Mediation House is of great significance in the history of international relations.

The establishment of the Mediation Institute implements the purposes and principles of the Charter of the United Nations, will fill the gaps in the international mediation mechanism, and is an important rule of law public product for improving global governance.

The establishment of the Mediation Institute also contains the wisdom of civilization and coexistence, which helps to transcend the zero-sum mentality of “you lose and I win”, promote the friendly settlement of international disputes, and build more harmonious international relations.

The establishment of the Mediation Institute also demonstrates the inclusive rule of law civilization, respects the wishes of the parties, and gives play to the advantages of being more flexible, more economical, more convenient and more efficient, complementing and synergizing with existing international dispute settlement mechanisms such as litigation and arbitration.

Wang Yi said that China expects all signatories to ratify the Convention as soon as possible and welcomes more countries to actively join.

Let us uphold the purposes of the Charter of the United Nations, adhere to voluntary participation, equal decision-making, and common benefits, respect the reasonable concerns of all parties, and achieve mutual benefit and win-win results.

Let us promote reconciliation, cooperation and harmony, cultivate a mediation culture, enhance mediation awareness, and establish a set of independent, flexible, pragmatic, efficient and internationally leading mediation rules and mechanisms as soon as possible.

Let us uphold fairness, justice and equity, pay attention to the true spirit of the rule of law, balance procedural justice and outcome justice, enhance the participation of developing countries, and enhance the representation and voice of the global South in international governance.

Wang Yi said that, after the agreement of the negotiating countries of the Convention, Hong Kong will become the headquarters of the International Mediation Institute. The return of Hong Kong itself is a successful example of peaceful settlement of international disputes. Hong Kong is backed by the motherland and connected to the world. It has the advantages of both the common law system and the continental law system, and has unique conditions in international mediation. I believe that the new star of the International Mediation Institute will grow together with the “Pearl of the Orient” and complement each other.

Pakistani Deputy Prime Minister and Foreign Minister Dar, Zimbabwean Minister of Foreign Affairs and International Trade Murvela, Nicaraguan Attorney General Morales, Serbian Minister of Justice Vujic, Swiss Foreign Minister Cassis, and UN Deputy Secretary-General Li Junhua delivered speeches respectively. All parties highly affirmed the contemporary value and far-reaching significance of the Mediation Institute, and believed that in the current world with increasing conflicts and intensified divisions, the establishment of the Mediation Institute is timely, crucial and of historic significance. The Mediation Institute is in line with the purposes and principles of the UN Charter, embodies respect, mutual trust, justice and harmony, is an effective measure to strengthen multilateralism, and will become a key pillar for improving global governance and a new milestone in promoting global rule of law. We call on more countries to sign and ratify the Convention and jointly achieve lasting peace and sustainable development through mediation. All parties appreciate China’s active role as a major country and look forward to the Mediation Institute’s contribution to promoting the peaceful settlement of disputes and promoting friendly cooperation among countries.

Hong Kong Chief Executive John Lee said in his speech that he welcomes the establishment of the world’s first intergovernmental international organization dedicated to mediation in Hong Kong. Hong Kong will give full play to the institutional advantages of “one country, two systems” and fully support the work of the Mediation Institute.

Source: 《International Business News》