"Black Monday" Shakes Global Markets, "Cash is King" Becomes Consensus Among Multiple Institutions

Securities Times Reporter Xu Xiaoru

The Middle East situation suddenly escalates, causing intense turbulence in global financial markets again.

On March 23, the market presented a rare “ice and fire” duality: on one side, stocks were under pressure and precious metals plummeted; on the other, energy and chemical products surged collectively.

Under the extreme shift between risk aversion logic and inflation expectations, funds rapidly withdrew from traditional safe-haven assets like gold and shifted into crude oil and related energy sectors—“Black Monday” storm swept across global markets.

However, influenced by U.S. President Trump’s latest remarks on U.S.-Iran relations, international oil prices plunged sharply that evening, with declines exceeding 13%. Gold prices also quickly narrowed their losses, while U.S. stock index futures such as the S&P 500 rose rapidly, significantly increasing market volatility.

Several institutional analysts pointed out that the core logic of this round of market movement is not solely due to geopolitical conflicts but a rapid re-pricing of the “oil price—inflation—monetary policy” chain. Against the backdrop of rising stagflation expectations, market valuation logic is undergoing profound changes.

Precious metals face a “stampede-like” decline

On March 23, the domestic commodity market showed clear differentiation, with precious metals suffering the most severe declines.

Data shows that Shanghai gold futures main contracts opened below 1,000 yuan/gram, with further declines in the afternoon, ending down 8.62% at 940 yuan/gram. The lowest touched 926.48 yuan/gram, a new low since November last year. In comparison, Shanghai silver futures fell even more sharply, dropping 11.67% to 15,411 yuan/kg, with trading volume soaring to 1.589 million lots. The intraday low of 15,070 yuan/kg also marked a new low since December last year.

The international gold market was similarly affected. London spot gold plunged over 5%, breaking through multiple key levels, with a low of $4,097 per ounce. Spot silver also fell 5%, dropping to $60.94 per ounce. The previously soaring gold prices have now given back all gains accumulated since 2026 in a short period. Earlier this year, gold prices rose as much as 30%, but from the high point, they have now retraced over $1,000.

As a result, domestic gold jewelry prices also declined. Brands like Chow Tai Fook and Lao Feng Xiang lowered their pure gold jewelry prices to around 1,375 yuan/gram. Gold prices in the Water Bay market fell to 1,108 yuan/gram, and investment gold bars dropped to 963 yuan/gram.

In response to the recent market volatility, the Shanghai Gold Exchange issued an emergency risk warning, urging member units to strengthen risk control measures and reminding investors to control positions reasonably and participate rationally.

Ping An Futures analyst Li Chenyang said that the sharp fluctuations in precious metals reflect investors’ deep concerns about geopolitical conflicts and high oil prices. Since precious metals experienced a significant rally earlier, accumulating substantial profit-taking positions, the shift in fundamentals has further amplified the decline.

Meanwhile, rising inflation expectations are changing the monetary policy path. Previously, the market widely expected the Federal Reserve to enter a rate-cut cycle by 2026, but with soaring oil prices and inflation expectations rising, the rate cut outlook has been quickly revised, and even rate hikes are now on the table.

It is worth noting that the significant correction in gold prices amid the war background diverges sharply from the traditional “safe-haven asset rising” logic, sparking widespread market discussion.

Chen Jiande, General Manager of Tianlang Fund, analyzed that on one hand, the opposite of gold is U.S. dollar credit. In the context of U.S.-Israel-Iran conflicts, the market has instead strengthened confidence in the U.S. credit system, boosting the dollar and suppressing gold prices. On the other hand, after repeated conflicts involving Russia-Ukraine and the Middle East, the market’s marginal sensitivity to geopolitical risks has decreased, and the expectation that “worse negative news” has been exhausted has weakened gold’s safe-haven appeal.

Energy and chemical products surge to limit-up

Contrasting sharply with precious metals, the energy and chemical sectors collectively strengthened, becoming the biggest highlight of the day.

By the close yesterday, five varieties—coking coal, liquefied gas, BR rubber, plastics, and polypropylene—hit the daily limit up. Crude oil, PTA, ethylene glycol, methanol, propylene, pure benzene, and para-xylene rose between 7% and 12%, showing a comprehensive breakout in the energy chemical sector. This indicates that market funds are clearly shifting towards upstream energy chains, with trading focus quickly moving from “risk aversion” to energy.

Li Chenyang pointed out that the direct trigger for this change is the continuous surge in international oil prices. Recently, WTI crude oil prices briefly exceeded $100 per barrel, reaching a four-year high. Amid the escalation of Middle East tensions, energy infrastructure in many regions has been damaged, significantly disrupting global crude oil supply.

Related estimates show that current effective global crude oil supply has shrunk by about 8 to 9 million barrels per day, and it is difficult to restore quickly in the short term. Although some countries have released strategic petroleum reserves, it is still hard to fully offset the supply gap, and the likelihood of oil prices remaining high or rising further is considerable.

International Energy Agency (IEA) Director Fatih Birol said Monday that this Middle East crisis is even more severe than the two oil shocks of the 1970s. The conflict has damaged major energy facilities in the Gulf region and nearly halted shipping through the Strait of Hormuz, which accounts for about 20% of the world’s oil and liquefied natural gas flows.

Vanda Insights founder Vandana Hari said, “In the short term, oil market sentiment may fluctuate sharply due to threats and rhetoric, but its longer-term trend will continue to be determined by the flow of Middle Eastern oil.”

Li Chenyang believes that the surge in oil prices is reshaping market expectations: “On one hand, high oil prices significantly boost global inflation; on the other, inflationary pressures reinforce the tightening stance of major central banks, pushing up U.S. bond yields and suppressing the prices of precious metals and other interest-free assets.”

From “risk aversion” to “stagflation,” market logic is being reconstructed

As the narrative of “rate cuts + de-dollarization” recedes, a new trading logic of “stagflation + liquidity tightening” is gaining favor, and the market is entering a more complex and volatile new phase.

In terms of asset performance, Li Chenyang believes that the market has clearly entered a “stagflation trading” stage, characterized by strong rises in crude oil and energy products, weakness in precious metals and most industrial commodities, and pressure on equities. Against the backdrop of declining global risk appetite, the Shanghai Composite Index fell below 3,900 points on March 23, turning negative for the year, with market sentiment becoming more cautious. However, some institutions remain optimistic about the medium-term outlook.

Kaifeng Investment noted that China and the U.S. are currently in a clear cycle misalignment. The U.S. continues to fight inflation in a high-interest-rate environment, while China is in a policy cycle focused on steady growth and preventing deflation, with ample room for fiscal and monetary policies.

From a valuation perspective, as of March 23, the Shanghai Composite’s price-to-earnings ratio was about 17.2 times, and the price-to-book ratio was around 1.50 times, both at their lowest in nearly a decade, offering sufficient safety margins. After the index fell below 3,900 points, expectations of large-scale support from major funds increased, limiting further downside.

Faced with the current complex and volatile environment, most institutions advise investors to remain cautious. On one hand, the risk of further escalation of geopolitical conflicts still exists, which could trigger oil price runaway and cause greater shocks to the global economy and financial markets; on the other hand, the policy paths of major central banks remain uncertain, and market volatility may stay high.

In this context, “cash is king” has become a consensus among many institutions—maintaining ample liquidity, controlling positions, and avoiding blind bottom-fishing are the main strategies at this stage.

From a medium- to long-term perspective, Kaifeng Investment states that China’s economic fundamentals and policy environment still have strong support. With valuations at low levels, energy structure advantages, continuous improvement in industrial competitiveness, and gradually releasing consumption potential, short-term volatility may instead create opportunities for high-quality assets to be deployed.