Trade War Rhetoric Spooks Chinese Investors Into Buying Gold ETFs
(Kitco News) - All the trade war rhetoric between the U.S. and China is creating demand for gold, with Chinese investors embracing gold ETFs as a safe-haven option in case things get worse.
China’s Bosera Gold ETF is on track to see biggest gains since being listed in Shenzhen in 2014 after already adding $553.8 million this year, Bloomberg reported.
Bosera is the top third commodity ETF of 2018 so far, right behind New York-listed iShares Gold Trust and SPDR Gold Shares.
The World Gold Council (WGC) attributes such interest to risks surrounding the U.S. and China trade talks.
“Inflows in the U.S. and China reflect broader market uncertainty related in part to geopolitical risks such as global trade tensions in March,” director of investment research at the WGC Juan Carlos Artigas told the news agency.
The latest development in the U.S.-China trade spat is U.S. President Donald Trump stating that China is likely to take down its trade barriers.
“China will take down its trade barriers because it is the right thing to do. Taxes will become reciprocal and a deal will be made on intellectual property,” Trump said in a Twitter post on Sunday.
President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!— Donald J. Trump (@realDonaldTrump) April 8, 2018
The statement comes after Washington made public its proposed tariffs on Chinese imports worth $50 billion last week, while Trump asked U.S. trade officials to look into additional tariffs on another $100 billion of Chinese imports.
China also introduced duties on 128 U.S. goods last week, including frozen pork, wine, fruits and nuts as a response to the U.S. steel and aluminum tariffs imposed in March.
But as Trump expressed optimism on Sunday, Chinese state media urged American industrial and commercial sectors to stand against Trump’s tariff policy.
“We call on the international business community including the United States industrial and commercial circles to take prompt and effective measures and urge the U.S. government to correct its errors,” state newspaper People’s Daily said on Sunday.
Meanwhile, gold edged down in Asian trading, with price action remaining mostly flat, with spot gold on Kitco.com last at $1,331.20, down 0.18% on the day.