Chinese investors have been flocking to exchange-traded funds (ETFs) tracking the price of gold, hoping to take advantage of the precious metal’s world-beating rally as stocks remain in the doldrums amid a tariff war.
The 13 mainland-domiciled gold ETFs have attracted new subscriptions of at least 7.9 billion units so far this year, according to financial data provider Wind Information. As of April 11, fresh inflows and the rising price of gold added 70.4 billion yuan (US$9.6 billion) to the funds’ assets under management, an 80 per cent year-on-year rise, according to data compiled by Guosen Securities.
Gold’s 33 per cent gain this year has beaten other key asset classes, with global investors loading up on the metal to hedge against rising geopolitical tensions. The pattern has strengthened since the US rattled global financial markets and upended global trade with its so-called reciprocal tariffs early this month. Goldman Sachs expects gold to hit US$4,000 an ounce at some point this year, implying a 15 per cent rise from the current level.
“Gold is shining on the backdrop of reshaping the global order,” said Liu Shiyao, an analyst at Zijin Tianfeng Futures. “The more than 60 per cent gain in gold prices over the past two years shows that it has come to take the place of US Treasuries and the dollar as the haven for investors.”
Spot gold prices rose 1.7 per cent to US$3,480.54 an ounce on Tuesday after topping US$3,400 for the first time in overnight trading. Investors snapped up the metal after US President Donald Trump’s comments on the Federal Reserve’s monetary policy undermined confidence in the independence of the world’s biggest central bank and lent more weight to the narrative of steering clear of US assets.
Money managers had 126.7 billion yuan of assets under management in gold ETFs as of April 11, according to Guosen Securities. The biggest is a 64.2 billion yuan fund managed by Shanghai-based Hua An Fund Management. Bosera Asset Management’s 28.9 billion-yuan gold ETF was second, followed by a 26.6 billion yuan fund by E Fund Management. All the funds track the benchmark spot gold contract trading on the Shanghai Futures Exchange.