Spot gold breached the US$4,400 per ounce mark during early trading on August 11, building on strong momentum from the previous week. In the first trading week of August (August 3-7), the London gold spot price surged over 7%, marking its largest weekly gain since February this year.
As gold prices rebounded, capital continued to flow back into gold ETFs. After turning to net inflows in July, gold ETFs saw net inflows of 5.469 billion yuan in the week ending August 7. Looking at a broader timeframe, since July 1, gold ETFs have accumulated total net inflows of over 10.5 billion yuan, with total assets under management (AUM) rising by nearly 25 billion yuan from the end of June to surpass 260 billion yuan again.
In the short term, institutional views on gold's price trajectory are clearly divided, with some cautioning against chasing the rally. However, over the medium to long term, institutions generally believe that gold's value as an inflation-hedging asset may further increase.
Capital Reflux
Currently, there are 14 commodity-based gold ETFs listed in the domestic market, primarily tracking the SGE Gold 9999 or the Shanghai Gold benchmark. Since 2026, the capital flows into gold ETFs have fluctuated in tandem with gold price movements. Between May and June, international gold prices experienced sharp volatility, with the London spot price falling below US$3,950 per ounce at the end of June. During these two months, over 23.1 billion yuan flowed out of gold ETFs.
However, since July, as gold prices rebounded, capital has flowed back into gold ETFs. According to Wind statistics, from July 1 to August 7, the net asset value (NAV) increases for the 14 gold ETFs generally ranged between 5.7% and 6.1%. During the same period, these 14 ETFs saw total net inflows of 10.543 billion yuan. Notably, in just the week of August 3 to August 7 alone, net inflows into gold ETFs reached 5.469 billion yuan.
Looking at individual products, the larger gold ETFs remained the primary beneficiaries of capital inflows. From July 1 to August 7, the Huaan Gold ETF, ChinaAMC Gold ETF, and E Fund Gold ETF recorded net inflows of 9.505 billion yuan, 1.113 billion yuan, and 803 million yuan, respectively, attracting significant investor interest. In terms of fund share changes, as of August 7, the total shares of all gold ETFs had increased by 1.221 billion units compared to the end of June. Among these, the shares of the Huaan Gold ETF increased by over 1.1 billion units, while the ChinaAMC Gold ETF and E Fund Gold ETF saw shares rise by 128 million and 90 million units, respectively. Conversely, a few individual gold ETFs experienced minor profit-taking outflows.
Driven by simultaneous increases in NAV and fund shares, the AUM of the Huaan Gold ETF returned to above 100 billion yuan. The AUM of gold ETFs under Bosera, E Fund, Guotai, and ChinaAMC also increased. As of August 7, the AUM of these five gold ETFs stood at 100.966 billion yuan, 42.285 billion yuan, 35.837 billion yuan, 33.76 billion yuan, and 16.397 billion yuan, respectively. Overall, the total AUM of all gold ETFs reached 268.079 billion yuan, an increase of nearly 25 billion yuan from 243.12 billion yuan at the end of June. However, this figure is still some distance from the year's high, which saw total gold ETF AUM surpass 340 billion yuan in mid-March.
Notably, overseas gold ETFs have also been attracting capital inflows recently. According to the latest data from the World Gold Council, global gold-backed ETFs saw inflows of US$3 billion in July, ending a two-month streak of outflows. Total AUM for global gold ETFs rose 1% to US$530 billion, with total holdings increasing by over 23 tonnes to 4,068 tonnes. Year-to-date, global gold ETFs have accumulated inflows of US$11 billion, corresponding to a 39-tonne increase in holdings. This indicates a renewed global investor focus on gold's allocation value. A weekly strategy report from the Industrial Futures Investment Consulting Department noted that capital reflux is appearing in both gold ETFs and related derivatives markets like gold futures, both domestically and internationally. The trend of buy-side participation from Asia and Europe is strengthening, with increasing signals of a recovery in investment demand.
Caution Advised on Chasing Gold Prices
Beyond ETF inflows, central banks worldwide continue to purchase gold. The latest data from the People's Bank of China shows that China's gold reserves reached 76.08 million ounces at the end of July, a net increase of 640,000 ounces month-on-month. This marks the 21st consecutive month of gold purchases by the PBoC. Furthermore, the World Gold Council's "Global Gold Demand Trends Report" for the second quarter of 2026, released in late July, stated that global central banks net purchased 288.9 tonnes of gold in Q2 2026, a sequential increase of 411% and a year-on-year increase of 62%.
The next move for gold prices is now a key market focus. In the short term, institutions are clearly divided amid a tug-of-war between bulls and bears. However, over the medium to long term, gold's strategic allocation value is widely recognized. Xinda Futures believes that in the short term, the US$4,200 level has transitioned from a prior resistance zone to an important support level. A price retracement and stabilization in this area would be a significant signal for continued bullish momentum. While expectations for a rate hike this year present some upward resistance, if subsequent inflation data continues to decline and the Fed signals a looser policy stance, gold could challenge the US$4,400 level or even higher.
Conversely, Guotai Fund suggests that US Treasury yields may continue to exert downward pressure on gold prices, and the metal could experience a period of bottoming in the short term. The China Galaxy Securities research team also noted that short-term attention should be paid to the disturbance of gold prices by Fed policy statements, real US Treasury yields, and the Middle East geopolitical situation. Wang Xiang, fund manager of the Bosera Gold ETF, cautioned that the significant rebound in gold last week occurred against a backdrop of previously waning bullish sentiment, driven by a difference between expectations and reality from data and short-term events, which attracted trend-following traders on a technical level. However, uncertainties surrounding the geopolitical outlook and the sustainability of a weak US dollar could lead to a rapid increase in gold's volatility, necessitating caution in chasing the rally.
On the other hand, from a medium to long-term perspective, Liu Yang, Chief Analyst of Non-Ferrous Metals at Zhongtai Securities, believes the US economy may be headed for stagflation, which is the fundamental driver for future gold price increases. He specifically analyzed that the current US economy exhibits characteristics of slowing growth momentum alongside persistent inflation, showing some similarities to historical stagflationary periods. If inflation is again driven by factors like energy prices, gold's value as an inflation hedge is likely to be further enhanced. Guotai Fund judges that the fundamental logic for a long-term gold bull market remains solid. Although short-term volatility and consolidation are possible, medium-to-long-term factors such as fiscal deficits, geopolitical tensions, and currency concerns continue to support gold demand. The firm pointed out, "Against the backdrop of monetary oversupply and the monetization of fiscal deficits, the US dollar credit system is under challenge. Coupled with frequent global geopolitical turmoil driving asset reserve diversification, demand for gold as a safe-haven asset is continuously rising. The global 'de-dollarization' trend positions gold to potentially become a new pricing anchor."
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