Chinese exchange-traded gold funds (ETFs) have seen a significant increase, with their holdings up 92% since the start of 2023, according to Wells Fargo.
The rise in ETF investments in gold indicates the strong interest of Chinese investors in finding a reliable asset during times of economic instability, the bank said.
Wells Fargo notes that ‘holdings in Asian gold exchange-traded funds (ETFs) have expanded by 56% since January 2023’, with a set increase of 92% in China.
This growth in gold assets occurred along with a 23% profit on gold over the same time frame. Moreover, the significant rise in Chinese gold ETF assets is seen as part of a broader trend towards favoring safe-haven assets as investors deal with economic difficulties.
Read also:Earnings call: Pajaya exceeds second-quarter 2024 earnings and raises full-year forecast
China’s economic situation has been characterized by difficulties, particularly in the real estate market, which has affected consumer confidence and reduced the attractiveness of investment options.
Wells Fargo noted that because of these problems, gold has gained popularity over less successful Chinese stocks and bonds. Since the beginning of the year, gold has achieved higher returns than both the Shanghai Composite Index and the Bloomberg Overall China Bond Index, boosting its attractiveness to investors.
Wells Fargo links the increase in gold-traded fund assets to these economic pressures, and expects Chinese investors to maintain interest in gold. The bank’s analysis indicates that ongoing economic challenges and modest gains in other financial sectors are leading investors to consider gold as a safe and beneficial investment.
Looking ahead, Wells Fargo expects gold prices to rise steadily, expecting them to continue rising until 2025, with an estimated year-end between $2,400 to $2,500 per ounce.
This article was produced and translated with the help of artificial intelligence and reviewed by an editor. For more details, please refer to our Terms and Conditions.
What stock should you buy in your next trade?
The computing forces of artificial intelligence are changing the stock market. ProPicks from Investing.com are 6 winning stock portfolios chosen by our advanced AI. In 2024 alone, ProPicks’ AI identified two stocks that jumped more than 150%, 4 more that jumped more than 30%, and another 3 stocks that jumped more than 25%. What is the arrow with the next jump?
