Chinese investors are cashing out of gold and pouring money into the domestic stock market, according to recent reports.
Gold Outflows, Stock Market Gains
Data shows that major Chinese gold-backed ETFs have seen a combined outflow of roughly $450 million this month alone. Analysts believe this is due to retail investors taking profits from gold investments and betting on the rising Chinese stock market. The CSI 300 Index, a key indicator of the Chinese stock market, has jumped almost 5.5% in the last month.
Government Gold Buying: More Than Meets the Eye?
Interestingly, while individual investors are selling, there’s speculation that the Chinese government is secretly buying up much more gold than officially reported. Experts debate whether the People’s Bank of China’s (PBOC) publicly released gold holdings accurately reflect their actual reserves. Some analysts believe the PBOC’s gold holdings could be more than double the official figures, potentially holding thousands of tons more than reported. While official numbers show around 2,296 tons, some estimates place the true figure at over 5,000 tons.