Global gold ETF assets under management hit a record high; Institutions: Short-term pressure on gold prices does not change its long-term allocation value

Since August, gold-related ETFs have continued to see capital inflows. As of September 14, domestic gold-related ETFs saw net capital inflows of over 10 billion yuan. Meanwhile, in August, global physical gold ETFs recorded about $18 billion in net inflows.

Recently, rising oil prices and heightened expectations of a Federal Reserve rate hike have put short-term pressure on gold prices. However, in the medium to long term, multiple institutions believe that central bank gold purchases, reserve diversification, and safe-haven demand continue to support gold.

Net inflows exceeding 10 billion yuan since August

Since August, gold-related ETFs in the domestic market have continuously seen increased allocations. According to Wind data, as of September 14, 13 gold-related ETFs had total net inflows of 14.707 billion yuan, with a combined fund size reaching 271.294 billion yuan. Specifically, Huaan Gold ETF had net inflows of 8.73 billion yuan, Guotai Gold ETF had 2.924 billion yuan, E Fund Gold ETF 1.469 billion yuan, and ChinaAMC Gold ETF 1.375 billion yuan, with leading products showing strong "money-attracting" effects.

Meanwhile, a report from the World Gold Council shows that in August, global physical gold ETFs had net inflows of about $18 billion, the second-highest single-month net inflow in history. The global gold ETF assets under management grew by 16% month-on-month to $615 billion, and gold holdings increased by 121 tons to 4,189 tons, setting a new record.

By region: in August, European gold ETFs had $7.9 billion in inflows, setting a local record high; North America saw net inflows of $7.7 billion; Asia saw net inflows of $2 billion, the highest since February this year.

Institutions optimistic about long-term support for gold prices

Recently, international oil prices have risen sharply. As of 8:00 p.m., September 15 (Beijing time), Brent crude oil futures were about $105.5 per barrel, having risen more than 2% intraday. Meanwhile, London spot gold was quoted at $4,284.345 per ounce, continuing to be under pressure.

Inflation concerns driven by higher oil prices and expectations of monetary tightening have become significant short-term disruptive factors for gold prices. Liu Tingyu, fund manager of the Gold Stock ETF at Yongying Fund, told Shanghai Securities News that the recent surge in energy prices has driven inflation higher and raised market bets on a Federal Reserve rate hike, putting short-term pressure on gold prices.

"In the short term, gold is sensitive to changes in short-term interest rates. Before this week’s Federal Reserve meeting concludes, volatility in rate hike expectations may continue to curb the elasticity of gold prices; if the meeting results are dovish or geopolitical risks escalate further, gold prices may have room for upward correction," a person related to Guotai Fund told reporters.

However, whether this round of short-term pressure will persist still depends on the room for monetary policy to respond to rising energy prices. Liu Tingyu said that while rate hikes can suppress demand, they struggle to alleviate supply-side pressure. Given the constraints of long-term government bond credit shocks and fiscal deficits, the Federal Reserve does not have room for continuous rate hikes. If the Fed’s rate hikes trigger stagflation, it may also benefit gold, and the long-term allocation logic for gold remains intact.

In the medium to long term, there are still demand drivers for gold beyond interest rates. ChinaAMC Fund stated: central bank gold purchases provide structural demand for gold; fiscal pressures in the United States and the repricing of dollar-denominated assets have increased the need for diversified asset allocation. Because gold is free of sovereign credit risk, it has become an important tool for diversification. In addition, geopolitical conflicts and shipping risks have also reinforced the safe-haven demand for gold.

Editor: Jiang Yuhan