Chinese investors hold about 150 billion yuan (US$21 billion) in gold exchange-traded funds (ETFs) as the price of gold continues to climb.

Gold ETFs on the Shanghai and Shenzhen exchanges have returned 42% so far this year, tracking the spot gold price, which hit a record US$3,895.3 an ounce before trading at US$3,875 on October 3.

Analysts from Swiss banks Julius Baer and Lombard Odier forecast gold prices could rise further, reaching between US$3,900 and US$4,000 an ounce over the next year, while JPMorgan predicts a rise to as much as US$4,150.

Central banks worldwide increased their gold purchases in the first half of the year, buying 480 tonnes, a 12% rise year-on-year, while China’s central bank raised its gold reserves to about 2,200 tonnes in August.

Meanwhile, China’s US Treasury holdings fell to a 17-year low of US$730.7 billion in July.

Expectations of US interest rate cuts, and concerns over the Federal Reserve’s independence, have also contributed to gold’s rally.

🔗 Source: South China Morning Post