Gelonghui July 19 丨The gold sector strengthened, with Sichuan gold surging 6%, followed by Western Gold, Chaohongji, Zhongrun Resources, Shengda Resources, Lao Fengxiang, and Yintai Gold.According to the news, the international gold price closed at $1980.8 an ounce on July 18, an increase of 1.25%.

On the ETF side, Harvest FundShanghai Gold ETF Fund,Jianxin Fundgold ETFAU,Guangfa FundShanghai gold ETF,E-Fangda FundETF,Quocgold ETF,Bosch Fundgold ETF funds, Tianhong FoundationShanghai gold ETF,southernGold ETFs rose more than 1%. Since this year, gold ETFs and Shanghai gold ETFs have increased by more than 10%.

Compared to physical gold, gold ETFs are more convenient. A gold ETF is a fund product that has gold-based investment targets, tracks fluctuations in the price of spot gold, and can be traded in the securities market. Domestic gold ETFs invest in gold spot contracts on the Shanghai Gold Exchange and closely track price changes in major gold spot contracts. A one-lot (100 shares) gold ETF fund corresponds to 1 gram of gold. A gold ETF is equivalent to a holding certificate for physical gold stored on the Shanghai Gold Exchange.

Judging from transaction costs, ETF transaction fees only charge brokerage fees. Judging from the convenience of trading, gold ETFs can be said to be the best, and there is often a premium when buying gold bars. From an allocation point of view, buying a gold ETF can basically achieve a one-stop allocation of assets such as stocks and gold; there is no need to go to the bank counter to trade.

In terms of holding costs, gold ETFs are funds that charge management fees and custody fees. It is more expensive to hold than physical gold. In other words, they obtain the convenience of transactions, and at the same time have to pay holding costs, which also reduces risk.

Investors can use their own securities accounts to trade gold ETFs on the secondary market just like trading stocks.Furthermore, gold ETFs support T+0 trading, so you can buy them on the same day and sell them on the same day. The T+0 trading mechanism greatly enhances the liquidity and capital usage efficiency of gold ETFs.

The size of gold ETFs in the A-share market had a remarkable effect. There were 14 gold ETFs in the entire market, and Huaan Fund, Bosch Fund, and E-Fangda showed a trifecta trend. Currently, the Huaan Gold ETF is the largest, reaching 9997 billion yuan, the Bosh Gold ETF exceeds 6.2 billion yuan, and the size of the E-Fangda Gold ETF is 3.745 billion yuan.

Some of the largest gold ETFs on the market were established in 2013 and 2014, while those established after 2020 are generally smaller.Similar products are all tracking homogenous contracts. Funding is generally more biased towards large-scale products with good liquidity, and smaller products struggle at the edge of liquidation.

On March 27, Ping An Fund issued the “Notice Concerning the Termination of the Listing Transaction of Ping An Shanghai Gold Traded Open Securities Investment Fund”, stating that March 30, 2023 is the date of termination of the listing of the fund.

Following the initial liquidation of the Ping An Shanghai Gold ETF, Dacheng Shanghai Gold ETF announced its liquidation.According to the announcement, the Shanghai Gold ETF product triggered the termination of the contract agreement due to the fund's net asset value falling below 50 million yuan for 50 consecutive working days. The last day of operation of the fund is May 29, 2023. It will enter the liquidation process from May 30, 2023 (the day after the last operation date), and will be suspended until listing termination on May 30, and trading will not resume.

Up to now, two liquidated gold ETF products have appeared on the market.In response, Sun Guiping, senior analyst at the Shanghai Securities Fund Evaluation Research Center, said:

The gold ETF circuit is too crowded, and competition for homogenization is fierce. Leading gold ETFs were established earlier. With many years of rich management experience, they have attracted more investors, and scale has a clear advantage.

Currently, most of the gold ETFs that are being liquidated were established after 2021. Under intense competition, it has been difficult to effectively expand the scale of newly established ETFs. Although the gold market has performed well in recent years, judging from the current situation, the scale growth of these products is still weak. In the long run, it has been difficult for fund companies to continue investing resources. Therefore, fund companies choose to liquidate products when gold's performance is good, which also shows the fund company's determination to integrate product layout.

Regarding the future trend of gold, Minsheng Securities said that the current round of gold's allocation window is likely to be ahead of previous cycles, and that gold's excess earnings will gradually become prominent as the Fed approaches the inflection point of interest rate cuts. It is mainly based on two major judgments: 1. The US economy will eventually go to a hard landing. Breaking the stickiness of core inflation at that time, the inflation data will fall sharply. 2. According to the theory of the equilibrium interest rate, if it wants to stimulate the economy, the central bank needs to quickly lower the policy interest rate below the equilibrium interest rate. At that time, the nonlinear pace of interest rate cuts may drive real interest rates to decline rapidly.