FOCUS: Chinese Gold ETPs Generating Investor Interest But Won’t Change Downtrend

HuaAn Asset Management, the firm behind one of the two newly approved Chinese gold-backed exchange-traded products, expects to see strong investor demand for the yellow metal.

Over the weekend, it was reported that the firm anticipates raising between 2 billion and 3 billion yuan, or about $326 million to $489 million for its new gold fund. In an interview with Reuters, Richard Xu, the fund’s portfolio manager, said the firm has received positive responses from institutional investors.

Because of the strong demand for gold, especially in Asian, analysts expect that HuaAn Asset Management could easily achieve its goal; however, it might not have a major impact on global prices.

How China tries to iron out the boom

With several major mining projects being put on ice this week, talk has quickly turned to whether the Australian mining boom is about to go bust.

Jumping on comments by Federal Resources Minister Martin Ferguson that “the resource boom is over”, the federal opposition has blamed the government’s mining and carbon taxes for BHP’s recent decision to shelve its $30 billion Olympic Dam extension project.

However, developments in the all-important iron ore industry suggest the drivers of the boom-and possible impending bust-lie not in Australia, but China.

Recent growth in the Australian iron ore sector has been driven by the rapid industrialisation of the Chinese economy.

The Asian Century Report

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FOCUS: Chinese Gold ETPs Generating Investor Interest But Won’t Change Downtrend

How China tries to iron out the boom

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