Chinese Gold ETF Holdings Surge 92% Since 2023

Chinese gold exchange-traded funds (ETFs) have seen a remarkable increase, with holdings rising by 92% since the start of 2023, according to a report from Wells Fargo.

The bank attributes this growth in gold ETF investments to strong demand from Chinese investors who are seeking stability amid economic uncertainties. It notes that holdings in Asian gold ETFs have increased by 56% since January 2023, with China’s figures leading the trend.

This uptick in gold holdings aligns with a 23% return on gold during the same timeframe. The significant rise in Chinese gold ETF holdings signals a broader shift toward safer assets as investors confront economic challenges.

China’s economy has faced notable weakness, especially in the property sector, which has negatively impacted consumer confidence and limited investment opportunities. Consequently, gold has become an increasingly attractive option compared to underperforming Chinese equities and bonds. Year to date, gold has shown better performance than these assets, highlighting its growing appeal.

Wells Fargo attributes the increase in gold ETF holdings to these economic pressures and expects that Chinese investors will continue to drive demand for gold. The bank’s analysis suggests that ongoing economic difficulties and lackluster returns in other markets are motivating investors to consider gold as a protective and potentially lucrative asset.

Looking forward, Wells Fargo maintains a positive outlook on gold prices, predicting continued increases through 2025, with a year-end target ranging between $2,400 and $2,500 per troy ounce.