Chinese investors are actively increasing investments in exchange-traded funds (ETFs) linked to gold. According to a report by the World Gold Council, during the first quarter of 2025, they invested $2.3 billion in such funds, which increased the total gold reserves by 23 tons. About this informs SCMP.
This investment surge lifted the total value of assets under management of Chinese ETFs to 101 billion yuan, and the volume of gold in them to a record 138 tons. In addition, purchases of gold bars and coins in China reached 124 tons, accounting for 38% of global demand, while ETFs accounted for 10% of global gold investments.
Analysts attribute this increase in demand to concerns about the devaluation of the yuan amid the worsening trade conflict with the United States. After President Donald Trump raised tariffs on Chinese imports by more than 100% in early April, the offshore yuan fell to an all-time low of 7.4290 per US dollar.
Additional pressure on the economy creates further complication of trade relations. Some Chinese goods are now subject to tariffs of up to 245%, and the European Union has imposed tariffs of up to 66.7% on some construction equipment from China.
In response to the volatility, the People’s Bank of China is also increasing its gold reserves. As of the end of March, the central bank owned 2,292 tons of gold, which is 6.5% of the country’s total foreign exchange reserves — the highest figure in history.
Currently, Chinese investors not only refrain from new investments in American funds, but also try to avoid participation in investment projects with US companies, even if foreign private investment funds are managing them. In some cases, Chinese funds withdraw planned investments if final arrangements have not yet been made.
