According to a report from the World Gold Council on Wednesday, Chinese investors poured a total of 16.7 billion yuan (US$2.3 billion) into gold ETFs in the first quarter, increasing their total holdings by 23 tonnes – the highest quarterly net inflow on record. The council is a London-based international trade association.
The surge pushed the total assets under management and aggregate holdings of China’s gold ETFs to all-time highs of 101 billion yuan and 138 tonnes, respectively.
Chinese investors’ enthusiasm for gold ETFs was in line with global market trends. Total gold investment – including gold bars, coins, and ETFs – reached 552 tonnes in the first quarter. Chinese purchases of gold bars and coins accounted for 124 tonnes, representing 38 per cent of the global total, while Chinese gold ETF purchases made up 10 per cent of global demand at 226 tones, the gold council said.
“It’s been a bumpy start to the year for global markets as trade turmoil, unpredictable US policy announcements, sustained geopolitical tensions and a return of recessionary fears have created a highly uncertain environment for investors,” said Louise Street, a senior markets analyst at the World Gold Council. “In this context, investment demand for gold has paved the way for the highest level of first-quarter demand since 2016.”
“Over the past 10 months, investors have returned to gold ETFs, ramping up their allocations since Q3 last year, and already in April, Asian inflows have stormed past their Q1 total. However, there is still room for growth, with global gold ETF holdings sitting 10 per cent below their 2020 high.”