Gold prices have staged a strong rebound recently, driving significant gains in both gold bullion and gold equity ETFs, with a clear resurgence in capital inflows. Since July, these ETFs have attracted over 20.2 billion yuan in net inflows, pushing their total assets back above the 300 billion yuan mark to 300.56 billion yuan.
Industry insiders note that gold's long-term investment thesis remains intact, but the metal's price is influenced by multiple factors, leading to notable volatility. Given uncertainties surrounding geopolitical outlooks and the sustainability of a weaker US dollar, which could trigger a rapid increase in gold's volatility, chasing high gold prices still requires caution.
Gold and gold stock ETFs have seen net inflows exceeding 20.2 billion yuan since July, with total scale returning to 300 billion yuan. The international gold price staged a strong rebound, with London gold posting a weekly gain of over 7% in the first trading week of August (August 3 to August 7), marking its largest single-week increase since February this year. On August 11, spot gold briefly broke through the 4,400 USD/oz mark during trading, reaching a new high since June 8. As of press time, London gold was trading at 4,409.11 USD/oz, up 0.9%.
Accompanying the sustained rise in gold prices, gold and gold equity ETFs have delivered notable gains. Data from Wind shows that as of August 11, since July, gold equity ETFs from fund houses like China Asset Management, HuaAn Fund, ICBC Credit Suisse, Yongying Fund, Guotai Fund, and Ping An Fund have all gained around 29%. Fourteen gold ETFs tracking the SGE Gold 9999 Index or Shanghai Gold have posted returns in the 7.5% to 8% range.
In terms of capital flows, since July, the combined net capital inflow into gold and gold equity ETFs has reached 20.267 billion yuan. The total scale of these ETFs has increased by over 43.8 billion yuan compared to the end of June, returning to above the 300 billion yuan threshold at 300.56 billion yuan. Among them, the HuaAn Gold ETF has attracted 10.99 billion yuan in inflows since July, with its latest scale returning to the 100 billion yuan mark at 104.217 billion yuan. Following closely is the Yongying Gold Stock ETF, which saw net capital inflows of 6.599 billion yuan since July, reaching a latest scale of 16.934 billion yuan. Additionally, the China Asset Management Gold ETF and E Fund Gold ETF have also attracted over 1 billion yuan in net capital inflows.
Overseas markets have also seen a return of capital flows. According to the World Gold Council, global gold-linked ETFs recorded a capital inflow of 3 billion USD in July, ending a two-month streak of outflows. The total assets under management of global gold ETFs rose 1% to 530 billion USD, with total holdings increasing by 23 tonnes to 4,068 tonnes.
HuaAn Fund stated that the recent rapid rebound in gold prices is driven by a confluence of three forces. Firstly, geopolitical tensions have eased, reducing inflation expectations. Positive signals from US-Iran talks have lowered market concerns about extreme oil prices. A significant drop in international oil prices has alleviated worries about rising inflation. Secondly, weaker-than-expected US economic data has diminished the urgency for the Federal Reserve to raise interest rates. The US dollar index and US Treasury yields have both weakened concurrently, easing the valuation pressure on gold. Thirdly, cross-asset capital rebalancing is underway. The global AI industry chain has experienced sharp volatility, with some funds moving out of the crowded AI trade and into safe-haven assets like gold for hedging purposes.
"The recent gold rebound is an expectation gap realized against the backdrop of earlier waning bullish sentiment, driven by data and short-term events, which has attracted trend traders on a technical level. However, considering the uncertainties in the geopolitical outlook and the sustainability of a weak US dollar, this could lead to a rapid increase in gold volatility. Chasing high gold prices still requires caution," said Wang Xiang, fund manager of the Boshi Gold ETF.
Short-term adjustments or volatility may lie ahead, but the long-term logic remains unshaken
As gold prices continue to recover, has the long-term investment thesis for gold been altered by the correction? HuaAn Fund believes that three core supporting factors remain unchanged. Firstly, the trend of de-dollarization continues, and central bank gold purchases are not retreating. In the second quarter of 2026, global central banks net purchased 289 tonnes of gold, a year-on-year surge of 62%. As of July this year, the People's Bank of China has increased its gold reserves for 21 consecutive months, with a single-month increase of approximately 14.93 tonnes in June, marking the largest monthly increase in nearly two and a half years. The Bank of Korea also purchased physical gold for the first time in 13 years. Secondly, the ongoing expansion of the US fiscal deficit is putting pressure on fiscal sustainability. The market worries that if long-term interest rates remain above 4.5%, it will place significant strain on US finances, constraining the sustainability of the high-interest-rate environment. Thirdly, against the backdrop of deglobalization and geopolitical restructuring, global geopolitical conflicts, trade policies, and tariff rules are frequently changing, and external uncertainties are unlikely to dissipate in the short term.
"The Fed kept rates unchanged in July, with Governor Christopher Waller leaning towards letting market interest rates bear part of the tightening burden. Market expectations for the number of Fed rate hikes this year have declined post-meeting. Market pricing often leads the Fed, and policy implementation typically marks an inflection point for expectations. The volatility in interest rates caused by weakened forward guidance and the decline in Fed credibility may provide medium-term support for gold. The lower-than-expected US Q2 GDP and non-farm payroll data, along with the return of US-Iran talks, suggest that US inflation and non-farm payrolls may continue to fall. Expectations for rate hikes are likely to diminish further. Gold may return to trading based on a weakening US dollar credit. In the accelerating trends of deglobalization and de-dollarization, gold's long-term allocation value is further highlighted," commented Liu Tingyu, fund manager of Yongying Fund.
Guotai Fund believes that the US dollar credit system is being challenged amid monetary oversupply and fiscal deficit monetization. Frequent global geopolitical turmoil is driving diversification of asset reserves, and demand for gold as a safe-haven asset continues to rise. However, short-term volatility and adjustments may still be on the horizon.
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