However, demand for physical gold has been strong in China with the pullback viewed by some as a buying opportunity.
“Gold hasn’t lost its appeal as a store of value in China,” said Xu Yiyi, the fund manager who will run the ETF, in the Bloomberg article. “Investors here usually like to buy on dips, so a decline in the bullion prices this year should work in our favor.”
Huaan and Guotai Asset Management Co. this month received regulatory clearance to start domestic exchange traded products backed by gold, which will be denominated in yuan, according to the report. [China Readies Gold ETFs]
Full disclosure: Tom Lydon’s clients own GLD.