Daily Gold Market Report

China’s Gold ETF Trading Halts:
Record Demand and Market Frenzy

(USAGOLD – 4/9/2024) Gold prices continue to hit all time highs, overnight reaching $2365.30/oz. Increasing numbers of traders across various markets are now joining the optimistic trend for gold and silver, indicating further potential for price increases in the short term. Gold is trading at $2355.39, up $16.46. Silver is trading at $28.30, up 45 cents. The China Gold-Buying Frenzy has led to significant disruptions in the trading of a gold company ETF, marking the second suspension in a week due to unprecedented demand. The ChinaAMC CSI SH-SZ-HK Gold Industry Equity ETF, managed by China Asset Management Co., saw its trading halted overnight after its price surged over 40% in four sessions, only to drop 10% upon resumption. This action was taken to safeguard investor interests as the ETF’s premium over its underlying assets soared beyond 30%. The frenzy reflects Chinese investors’ desperation for investment alternatives not tied to the struggling domestic economy, with gold ETFs attracting nearly $600 million in global net inflows in just the past week. Analysts suggest that the surge in gold and gold ETF demand is driven by investors seeking to diversify with commodities and foreign ETFs amidst China’s economic challenges, including property market woes and volatile stock markets.