Chinese investors withdrew a record US$2.91 billion from domestic gold exchange-traded funds (ETFs) in June, securing profits as a robust stock market rally and a strengthening yuan reduced the appeal of gold as a safe-haven asset, according to the World Gold Council (WGC).
Mainland Chinese funds were the primary contributor to Asia’s gold ETF decline in June, as improved investor risk appetite drove a shift toward higher-yielding, riskier assets, according to the council’s Wednesday report. This trend further depressed gold prices when measured in renminbi terms.
This followed China’s leading role in global gold ETF inflows during the first four months of the year.
Huaan Yifu Gold ETF experienced outflows of approximately US$1.14 billion, while Guotai Gold ETF saw US$352.1 million in withdrawals and E Fund Gold Tradable Open-end Securities Investment Fund reported US$334.2 million in redemptions, as per the data.
The substantial selling pressure pushed Asia’s total ETF outflows to US$2.3 billion in June, marking the region’s worst single-month performance on record.
Despite the June outflows, Asian gold ETFs recorded a net US$12 billion in inflows during the first half of the year, the strongest first-half performance in the region’s history and the largest contributor to global ETF flows. Nationally, global gold ETF inflows remained positive at US$8 billion in the first half of the year, the report noted.
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