Gold prices have hit new highs this year! Global hedge fund giants are selling l

Gold prices have repeatedly hit new highs, attracting significant market attention and prompting a rush of investors to buy in. In contrast to the general enthusiasm for rising gold prices, the global hedge fund giant Bridgewater is rapidly retreating. Regular reports from several gold ETFs show that Bridgewater (China), which has been holding gold ETFs firmly since mid-2022, has sold off significantly in the first half of this year. For instance, by the end of 2023, Bridgewater held 31.59 million shares of the Easy Fund Gold ETF, and in the first half of this year, it sold at least 27.6 million shares. The 2023 annual report of the Easy Fund Gold ETF shows that as of the end of 2023, Bridgewater (China) Investment Management Co., Ltd. - Bridgewater All Weather Enhanced China Private Securities Investment Fund No. 3 was the largest holder with 31.5935 million shares. Bridgewater (China) Investment Management Co., Ltd. - Bridgewater All Weather Enhanced China Private Securities Investment Fund No. 2 and Bridgewater (China) Investment Management Co., Ltd. - Bridgewater All Weather Enhanced China Private Securities Investment Fund No. 1 held 5.7018 million shares and 4.681 million shares, respectively. As shown in the figure below:

However, in the first half of this year, Bridgewater sold off a large amount of this ETF. By the end of the second quarter of this year, the above three products had disappeared from the top ten holders list of the ETF. The figure below shows the latest list of holders as of the end of the second quarter: From the above figure, it can be seen that as of the end of June this year, the tenth holder of the Easy Fund Gold ETF held 3.9876 million shares. This means that in the first half of this year, Bridgewater (China) Investment Management Co., Ltd. - Bridgewater All Weather Enhanced China Private Securities Investment Fund No. 3 sold at least 27.6 million shares. Considering the hedge fund's approach to asset allocation, when selling off such a proportion of an asset, it is more likely to have chosen to liquidate the sale. Similar situations also occurred with Bosera Gold ETF and Huaan Gold ETF. By the end of 2023, the Bridgewater All Weather Enhanced China Private Securities Investment Fund No. 3, Bridgewater All Weather Enhanced China Private Securities Investment Fund No. 1, and Bridgewater All Weather Enhanced China Private Securities Investment Fund No. 2 held 46.6248 million shares, 9.2942 million shares, and 8.7106 million shares of the fund, respectively. As shown in the figure below: According to the fund's mid-term report for 2024, in the first half of this year, the above products all exited from the top ten holders list of the fund. By the end of last year, Bridgewater (China) Investment Management Co., Ltd. - Bridgewater All Weather Enhanced China Private Securities Investment Fund No. 3 held 82.6646 million shares of Huaan Gold ETF, ranking as the second-largest holder (as shown in the figure below). By the end of June this year, the product had exited from the top ten holders list of the fund. However, unlike Bridgewater's operations, a large amount of capital is still flowing into gold ETFs. Recently, the latest report from the World Gold Council showed that global gold ETFs attracted $3.7 billion in net inflows in July 2024, marking the third consecutive month of net inflows. In terms of trading volume, the global gold market's trading volume increased in July. Data shows that the average daily turnover of the global gold market in July was $250 billion, a month-on-month increase of 27%, far higher than the average daily turnover of $163 billion in 2023. Not long ago, the World Gold Council's second quarter 2024 "Global Gold Demand Trends Report" showed that over-the-counter trading demand and central bank gold purchases drove gold prices up, with over-the-counter trading demand in the second quarter growing by 53% year-on-year, providing a boost to global gold demand; at the same time, the global central bank net gold purchases increased by 6% year-on-year, leading to a 4% increase in total gold demand, higher than the 3% growth rate of gold production. Domestic investors' enthusiasm for purchasing gold ETFs is also on the rise. Data from the China Gold Association shows that in the first half of this year, the domestic gold ETF holding volume rose to 924.4 tons, setting a historical high since the domestic gold ETF was listed in July 2013. However, as an important global consumer of gold jewelry, China's gold jewelry consumption declined in the second quarter. The gold jewelry demand in the Chinese market in that quarter hit a new low for the same period since 2009, at only 86 tons. Industry insiders say that the Chinese market is not an exception, and the main global gold jewelry consumption markets have generally shown varying degrees of decline due to the historically high gold prices. According to a report by China Securities News, Huaan Fund stated that gold ETFs are based on gold as the investment target, tracking the fluctuations in the spot gold price. Compared to investing in physical gold, gold ETFs have stronger liquidity, more convenient operations, and lower fees (discount loss). In addition, gold ETFs can lend out physical gold to earn interest income. In the long term, gold prices have an inverse relationship with U.S. Treasury yields. As the certainty of the Fed's interest rate cuts continues to strengthen, future U.S. Treasury yields are expected to decrease, which may bring more opportunities for gold ETF investment. ICBC Credit Suisse Fund stated that during the gold price rise cycle from 2018 to 2020, the holdings of gold spot ETFs experienced significant fluctuations, but their holdings increased rapidly in the later period. Although the short-term performance of some gold stocks deviated from the gold price, it is expected to be repaired as the gold price continues to rise. In the future, attention should be paid to the impact of inflation and other U.S. economic data and the trend of the U.S. stock market on market liquidity.