Chinese investors see comfort in Gold ETF

Gold ETF

In a week through Monday, China garnered $52 million, the biggest inflow into commodity-linked ETFs of all countries. China’s largest ETF, Huaan Yifu Gold ETF, backed by raw materials attracted nearly $72 million last week. This was more than enough to balance outflows from its peers. Just for this week, round $230 million was withdrawn from commodity ETFs globally.

After the yuan suffered its worst annual loss against the dollar in more than twenty years, money is moving to bullion as investors look for an alternative to the faltering yuan. Weakening currencies are bolstering demand for a haven at a time when concerns about the U.K.’s departure from the European Union and with the driving up of the prices of gold due to the uncertainty of President-elect Donald Trump’s policies plus a potential trade war with China.

Futures contracts for gold changed slightly at $1,212.70 per ounce on the New York Commodities Exchange gaining 5.2 percent this year. Prices have made a comeback since their disastrous quarterly loss in more than three year in December.

Around $762 billion has departed china in the 11 months through November, according to a Bloomberg Intelligence gauge of fund flows that does not include outgoing yuan. Ever since 2014, capital has left the nation as foreign investors cash out and local companies repay dollar debt amid a slump in China’s currency. China’s foreign-exchange reserves went down $41.1 billion to a five-year low of $3.01 trillion.

Huaan Yifu garnered the third-biggest inflow of gold ETFs behind Frankfurt’s Xetra-Gold ($172.million).


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