Hoarding behavior

Money managers and hedge funds are increasingly becoming bearish on gold. With the curb in ETF investments for the past few weeks, the overall market seems to be cutting its long positions held in precious metals. China, however, appears to be mesmerized by the slide in precious metal prices, as it keeps increasing its holdings in gold.

After the $5 billion stock market collapse in China, investors fled to gold. Even a third straight annual decline in prices has failed to make gold lusterless in China. In September, after the surprise devaluation of China’s currency, China imported the most gold in 19 months from Hong Kong. It seems that China is hoarding the metal in order to become the next superpower, backing its currency with gold.

Gold Demand Stays Strong in China

ETF flows

The demand for gold in China could reach about 1,000 metric tons for 2015, which is close to the prediction in India. Which one of these will emerge, then, as the gold buying leader? Gold futures have fallen 8.7% on a 30-day trailing basis. The fall has affected hedge funds, which withdrew their money from exchange-traded products such as the iShares Silver Trust (SLV) and the SPDR Gold Shares ETF (GLD). However, the physical demands still stay active in the Asian markets.

Gold mining companies such as GoldCorp (GG), New Gold (NGD), and AuRico Gold (AUQ) fell 2.9%, 8.1%, and 2.8%, respectively, on Friday, November 20, 2015, due to precious metals slipping further. These three companies contribute 10.5% to the VanEck Vectors Gold Miners ETF (GDX). GDX fell 4.1% on Friday, November 20.

Latest articles

WeWork is gearing up for an IPO. On Wednesday, the company made its IPO filing with the SEC public and expects to garner $3.5 billion from its IPO.

After FCC Chairman Ajit Pai recommended the approval of the T-Mobile–Sprint merger, Representative David Cicilline urged the FCC to allow public comment.

Cresco Labs (CRLBF) is set to report its Q2 earnings on August 21 after the market closes. The company's stock fell 5.3% yesterday.

Cannabis stocks mostly traded in positive territory today. Supreme Cannabis (FIRE) and Aurora Cannabis (ACB) rose about 9.5% and 5.5%, respectively.

NVIDIA (NVDA) stock soared 6% in today’s trading session as its Q2 earnings for fiscal 2020 beat estimates. However, its guidance missed estimates.

Nio Inc. (NIO) has disrupted the automotive space since 2014 but only made waves in the market since its IPO. Investors have suffered numerous setbacks.