China 'Buys the Dip' in Gold After Record ETF Outflows
Wednesday, 7/30/2025 16:07
GOLD fell again Wednesday against a surging US Dollar, setting its lowest London price in 3 weeks as headlines proclaiming a sudden flight out of Chinese bullion-backed ETF trust funds preceded the US Federal Reserve's July interest-rate decision.
After
spring 2025 saw record trading into China gold ETFs, "Some investors are taking profits from gold and rotating into equities to chase stronger momentum," Bloomberg quotes analyst Steve Zhou at Huaan Fund Management Co., issuer of the largest gold ETF available to Chinese investors.
"Retail investors have been the main drivers of the outflows,"
Zhou says, highlighting the attraction of swapping into this month's 5.5% jump in the CSI300 index of Chinese corporate equities.
Mid-month, Asian-listed gold ETFs as a group grew to need the most bullion backing ever, peaking above 324 tonnes according to data compiled and published by the mining industry's World Gold Council.
Chinese outflows saw that fall towards 317 tonnes by Friday last week. But Monday and Tuesday both marked small inflows on figures published by
The Bold Report from Bitcoin-gold investment managers ByteTree, with Shanghai's Huaan Yifu Gold ETF expanding by 0.5% in size yesterday to lead a rise in 6 out of China's 12 such products.
"Every dip in gold gets bought by China," comments Bruce Ikemizu, formerly of Chinese-owned ICBC Standard Bank's Tokyo office, after China's benchmark gold bullion price today rallied 0.2% from Tuesday's near-3-week low.
Should today's Shanghai price above ¥769 per gram hold on Thursday, it will mark China's 2nd-ever highest monthly gold price close, ¥10 below April's finish.
But with the US Dollar rising and the Yuan falling on the FX market today, that cut Shanghai's gold premium relative to quotes for London settlement almost in half, down from $19 per Troy ounce to $11.
That was still more than twice the past 3 weeks' average incentive for buying gold in London and flying it to Shanghai, and nearly 50% above the past decade's typical level.
Over in the USA, world No.1
gold ETF the SPDR Trust (NYSEArca: GLD) saw no change in size Tuesday after edging back 0.1% from last week-end's 3-month high above 956 tonnes.
No.2 gold-backed ETF the iShares Trust (NYSEArca: IAU) was also unchanged in size, holding 0.2% smaller than last Wednesday's 2-year high.
With the US Fed universally expected to keep Dollar interest rates unchanged Wednesday, the price of gold in London briefly dipped through $3300 per Troy ounce for the first time in 3 weeks before clearing around $3302 at the 3pm market-wide auction.
Euro priced gold in contrast tested yesterday's 1-week high around €2889, while the UK gold price in Pounds per ounce held flat for the week so far at £2485.
Silver meantime hit 2-week Dollar lows at $37.50 per Troy ounce, down more than $1 for the week so far.
Platinum prices also sank to 2-week lows, down more than $100 per ounce from mid-July's sudden 11-year high to trade back at $1362.
Sister-metal palladium also fell but held a $15 rise for the week so far at $1240 per ounce.
China's stock market was unmoved by this morning's Russian earthquake and tsunami alerts, while Australia and Japan rose, as did European bourses and then America.
Email us
