Chinese investors are pouring into gold-backed funds at an unprecedented rate, accounting for more than half of global bullion exchange-traded fund (ETF) inflows over the past month, according to the Financial Times. The rush comes as investors in the world’s second-largest economy seek safe havens amid escalating trade tensions and concerns over domestic economic stability.
The Financial Times reports that China has become the dominant force behind the recent spike in global demand for gold ETFs, with local investors turning to the precious metal as a shield against currency depreciation, geopolitical uncertainty, and weak stock market performance.
This surge in demand coincides with heightened trade friction between China and major Western economies, particularly the United States. Gold, traditionally seen as a safe-haven asset, has seen increased buying interest as Chinese investors grow wary of the risks posed by a prolonged trade war and a slowing property sector.
Analysts told the Financial Times that the scale and speed of Chinese inflows into bullion funds are “unprecedented,” further fueled by limited domestic investment options and tightening capital controls that restrict overseas investments.
Financial advisors and asset managers in China are reportedly steering clients toward gold ETFs as a defensive strategy. “With increasing volatility in equities and the yuan under pressure, gold has become a strategic asset for many Chinese portfolios,” one fund manager said.
The recent inflows have helped buoy global gold prices, which have been on an upward trajectory in recent weeks. Market watchers say the trend could continue if macroeconomic uncertainty persists and Beijing refrains from aggressive stimulus measures.
