China Gold-Buying Frenzy Sparks Chaos In ETFs
BY TYLER DURDEN
TUESDAY, APR 09, 2024 - 08:10 AM
For the second time in a week, trading in an ETF that owns gold companies was halted in China overnight.
The ETF’s price had gained over 40% in the past four sessions before falling 10% after trading resumed Monday.
“The lack of alternatives, and the fact that it’s become a lot more difficult than it was a few years ago to get your money out of China and invest elsewhere - I think that’s definitely helping gold,” said Nikos Kavalis, managing director at consultancy Metals Focus Ltd.
“Demand is pretty decent, considering where the price is.”
As Bloomberg's Eric Balchunas highlighted: "Investors [in China] are so desperate to buy things that are not linked to their own economy/stock mkt, which has been in the gutter."
For context, that surge in the ETF correlated with a spot gold price near $2700...
Source: Bloomberg
Bloomberg's Eric Balchunas notes that "if it were, they’d be going gaga for them given how much FOMO they have been showing for gold and US stocks (btc easily outperforming both)."
