The bugle call for the breakthrough of gold ETFs continues to sound, with multiple funds doubling in size this year, and the total scale also doubling, with unabated momentum for increased allocation.

Affected by the geopolitical conflicts in the Middle East, the COMEX gold price continued to break through upwards, and the secondary market prices of gold-related ETFs also rose for consecutive days.

According to this year's data, the year-to-date gains of all gold-related ETFs in the entire market were above 27.9%. Among them, the six ETFs tracking the SSH Gold Stock Index showed strong growth, with year-to-date gains all above 41%. During this period, the scale of gold-related ETFs in the entire market gradually climbed, increasing from 72.608 billion yuan at the beginning of the year to 163.120 billion yuan, representing a growth of 124.66%.

Several fund companies believe that due to uncertainties in tariffs and geopolitics, risk-averse capital may flow into gold. Coupled with the impaired credit of the US dollar and US Treasuries, as well as the continuation of central bank gold purchases and the major cycle of interest rate cuts by the US Fed, the medium and long-term allocation value of gold continues to be favored.

Gold ETFs Continue to be "Favored" with Market Size Exceeding 160 Billion Yuan

On June 16, affected by the geopolitical conflicts in the Middle East, COMEX gold broke above 3450, and gold and gold stock indices continued to rise, with related ETFs once again gaining market attention.

Data shows that since June 10, multiple ETFs tracking the SSH Gold Stock Index have risen by more than 7%, while several other gold ETFs and Shanghai Gold ETFs have risen by more than 2%.

Looking at earlier data, as of June 13, the year-to-date gains of all gold-related ETFs in the entire market were above 27.9%. Among them, the six ETFs tracking the SSH Gold Stock Index showed strong growth. The Yongying CSI Shanghai-Shenzhen-Hong Kong Gold Industry Stock ETF achieved a year-to-date gain of 43.46%, while the ChinaAMC CSI Shanghai-Shenzhen-Hong Kong Gold Industry Stock ETF, ICBC CSI Shanghai-Shenzhen-Hong Kong Gold Industry Stock ETF, Guotai CSI Shanghai-Shenzhen-Hong Kong Gold Industry Stock ETF, Hua'an CSI Shanghai-Shenzhen-Hong Kong Gold Industry Stock ETF, and Ping An CSI Shanghai-Shenzhen-Hong Kong Gold Industry Stock ETF also rose by 43.27%, 42.79%, 41.79%, 41.79%, and 41.31%, respectively.

Some ETF shares that experienced redemptions during the earlier period of gold price fluctuations and adjustments have also shown signs of "recovery". Since the Israel-Iran conflict, half of the gold-related ETF shares in the entire market have increased.

Since the beginning of this year, the total shares of gold ETFs in the entire market have increased by 10.538 billion, and the scale has increased by 90.512 billion yuan, reaching a latest market size of 163.120 billion yuan, representing a growth of 124.66%.

Among these, there are products whose scales have doubled. For example, the scale of the Yongying CSI Shanghai-Shenzhen-Hong Kong Gold Industry Stock ETF increased from 1.651 billion yuan at the beginning of the year to 4.755 billion yuan now, nearly tripling; the E Fund Gold ETF increased by 13.240 billion yuan from 13.248 billion yuan at the beginning of the year to 26.488 billion yuan; the Guotai Gold ETF increased by 11.399 billion yuan from 7.142 billion yuan at the beginning of the year to 18.541 billion yuan. During the same period, Bosera Gold ETF also increased from 15.004 billion yuan to 29.26 billion yuan. Products such as Huaxia Gold ETF, ICBC Gold ETF, Fullgoal Shanghai Gold ETF, and CCB Principal Shanghai Gold ETF have all shown multi-fold growth in scale since the beginning of this year.

The momentum to increase gold allocation remains.

Regarding the future allocation value of gold-related assets, multiple fund companies believe that under the current circumstances, market participants are more motivated to continuously increase their gold allocation.

Data shows that central banks are continuing to increase their gold holdings. The People's Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) announced the official reserve asset data for May. As of the end of May 2025, China's gold reserves stood at 73.83 million ounces, up 60,000 ounces MoM, marking the seventh consecutive month of growth.

"The potential geopolitical conflict risks in Iran and other countries, along with the escalation of related conflicts, may catalyze global attention to safe-haven assets, making the upward logic of gold prices more robust," pointed out Liu Tingyu, the fund manager of Yongying Gold Stock ETF.

Hua'an Fund expressed that, against the backdrop of the U.S. debt crisis and the erosion of the U.S. dollar's credit, global central banks may continue to purchase gold and diversify their foreign exchange reserves.

Meanwhile, due to uncertainties surrounding tariffs and geopolitics, safe-haven funds may flow into gold. Coupled with the erosion of the U.S. dollar's and U.S. debt's credit, as well as the continuation of central bank gold purchases and the broader cycle of the US Fed's interest rate cuts, the company continues to be optimistic about the medium and long-term allocation value of gold.

Regarding tariffs, Liu Tingyu believes that the U.S. Federal Court of Appeals' extension of the deadline for the Trump administration's tariff enforcement issues implies that its tariff policies can still be implemented normally. Under this assumption, the contradictions within the Trump administration in the U.S. will significantly ease, and it is expected that Trump will have sufficient room to act hawkish in the coming period, further reducing the suppressive factors on gold. Additionally, gold is positively correlated with inflation in the long term, and the significant rise in oil prices will also affect gold prices through inflation.

"Finally, we are more concerned about the main logic of gold—the weakening trend of the credit of the U.S. dollar and U.S. debt. The U.S. fiscal deficit in May was $316 billion, with the annual deficit up 14% YoY, further plunging into deficit. This year, the market's confidence in U.S. fiscal discipline has continued to wane, and the 'America COMPETES Act' may exacerbate the upward trend of the deficit. The avoidance of extreme risks in U.S. debt may become the main driving force for gold prices," Liu Tingyu said.

Looking ahead, he believes that as the uncertainties surrounding U.S. tariffs and the rise in the deficit rate further erode the credit of the U.S. dollar and U.S. debt, the global trend of "de-dollarization" will intensify, and market participants will be more motivated to continuously increase their allocation of gold assets. It is worth mentioning that with the upward shift in the gold price center and the continuous expansion of gold mining companies' production, the performance of gold stocks is expected to continue to grow rapidly. Gold jewelers are also experiencing a turning point in performance and a trend toward product high-endization, which similarly offers good growth potential.