Gold breaks through $5,000, ETF scale approaches 350 billion yuan

21st Century Business Herald Reporter Ye Maishui
Gold in Asia opened the morning below $5,000 per ounce, reaching a low of $4,981.94 per ounce by 1:00 PM Beijing time.

Gold prices have recently entered a correction phase, with this year’s gains reduced to 15%. Since surging to $5,596.68 per ounce on January 28, gold has been in a correction, with a clear downward shift in focus. However, despite the volatility in gold prices, A-share investors remain highly enthusiastic about gold investments. Especially after banks imposed “purchase limits” on gold, the combined scale of 14 gold ETFs listed in A-shares has approached 350 billion yuan.

Why Gold Isn’t Rising but Falling

After the escalation of the US-Iran conflict, gold did not continue to hit new highs as the market expected. Instead, it experienced sharp fluctuations, with a decline of up to 4.11% on March 3. Currently, it hovers around the $5,000 per ounce level.

The world’s largest gold ETF—SPDR—also saw a decrease in holdings, with the latest holdings at 1,071.57 tons, down nearly 30 tons from 1,101.33 tons on March 2.

Since the Iran conflict erupted two weeks ago, gold prices have fallen about 6% from pre-war levels, raising doubts about its safe-haven properties.

JPMorgan Chase provided a systematic analysis in its March 13 commodities research report: in the initial phase of market stress, gold is often “sold off together,” which is a well-documented historical pattern, not a sign of the failure of its safe-haven function. Historical data shows that this initial correction often presents a tactical buying opportunity, with gold prices typically rebounding quickly within a few trading days to recover losses.

JPMorgan Chase pointed out that the current gold sell-off is driven by multiple factors: soaring energy prices boosting inflation expectations, which significantly dampen expectations for Fed rate cuts; coupled with a rapid rebound in the dollar, creating a recent bearish environment.
However, the bank believes the main driver is widespread de-risking triggered by increased stock market volatility—when the VIX (fear index) remains high and continues to rise, investors are forced to raise liquidity amid margin calls, portfolio rebalancing, and VaR (Value at Risk) shocks. Gold holdings are among the first to be sold, leading to noticeable outflows from global gold ETFs last week.

In the short term, JPMorgan Chase warns that gold may face further downside, especially if stock markets more aggressively price in worsening global economic prospects, triggering a new wave of risk aversion. Continued rate market adjustments to Fed rate cut expectations could also weigh on gold. But the bank emphasizes that the longer energy disruptions last and the more substantial their impact on inflation and economic growth, the more likely it is that the macro environment for gold will “shift rapidly and significantly to the upside,” especially if the Fed adopts a more easing stance.

According to JPMorgan Chase’s latest price forecasts, the bank maintains a strong bullish outlook on gold, expecting the average price in Q1 2026 to be $5,100 per ounce, rising to $5,530 in Q2, $5,900 in Q3, and further climbing to $6,300 in Q4.

Guangfa Securities issued a research report stating that since the US-Iran conflict, “safe-haven trading” has intensified, with risk assets broadly declining and global stock markets experiencing turbulence. Key energy routes like the Strait of Hormuz have been blocked, and escalating Middle East tensions have raised concerns over oil supply, causing oil prices to rise rapidly. The increase in oil prices has sparked worries about stagflation, leading to a continuous strengthening of the dollar and a decline in precious metals.
Specifically, in the short term, oil prices are expected to continue rising slowly before entering a high-volatility phase; gold prices may fluctuate in the short term, with a need to wait for new narratives in the long term.

A-shares Gold ETF Scale Approaching 350 Billion Yuan

Since the beginning of this year, A-share investors have shown strong enthusiasm for gold ETFs. According to Tonghuashun statistics, as of March 15, there are 14 gold ETFs listed in A-shares, with the latest total shares outstanding at 31.76 billion, and a market value of 345.33 billion yuan. This is an increase of 503 million shares over the past week, 1.9 billion shares compared to last month, and 6.34 billion shares since the start of the year. Among them, Huatai-PineBridge Gold ETF is the largest, with a recent market value of 128.02 billion yuan. BOCOM Gold ETF and Guotai Gold ETF rank second and third, with sizes of 54.46 billion yuan and 47.39 billion yuan respectively.

ETFs have become the most convenient tool for gold investment. During the “2026 Harvest Fund Super Index Festival” jointly hosted by the Shenzhen Stock Exchange Fund Management Department and Harvest Fund, a relevant official from the Shenzhen Stock Exchange said that after years of development, China’s ETF market has achieved comprehensive growth in scale, structure, and influence, becoming an important tool for household wealth management.

Over the past year, China’s index investment market has experienced rapid development, with the total size of domestic ETFs surpassing 60 trillion yuan for the first time, a year-on-year increase of 62%. Broad-based ETFs grew by 17%, and new industry/theme ETFs related to new productivity sectors have been launched intensively. Bond ETFs like the Sci-Tech Innovation Bond ETF have gained popularity. Additionally, a normalized dividend mechanism has been gradually established, continuously improving investor returns, making index investment a “standard” household wealth management tool.

Besides gold ETFs, the market also has more flexible gold stock ETFs, with four such ETFs this year all gaining over 10%. However, most gold ETFs operate on a T+0 basis, while gold stock ETFs are mostly T+1.

Some analysts believe that the increase in gold ETF holdings during the correction is due to two reasons: first, the profit-making effect of gold still exists; second, recent bank purchases of gold have shifted some funds into gold ETFs.

Ray Dalio, founder of Bridgewater Associates, recently reiterated his strong optimism about gold. He said, “I think everyone should have 5% to 15% of their personal portfolio in gold.” He added, “In times of disaster, gold can help diversify risk. When other assets perform poorly, gold often performs well.”

“People should worry, companies should worry, and countries should worry: do they have enough gold?” he asked. “If their gold allocation is below 5% of their portfolio, the answer is probably no.”

Last month, during a historic sell-off in gold, Dalio also publicly supported gold, calling it “the safest currency.”