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on september 7, the central bank released data showing that china's gold reserves at the end of august were 72.8 million ounces (us$182.98 billion), the same as the previous month. this means that the central bank has stopped increasing its gold holdings for four consecutive months since may this year.

on the other hand, the private equity fund of bridgewater, the world's top hedge fund, in china frantically sold gold etfs in the first half of this year, with an estimated share of about 189 million. it is worth noting that this is the first large-scale sell-off in two years after bridgewater purchased a large number of gold etfs in the first half of 2022.

bridgewater fund sold off its gold etf for the first time in two years. the central bank has suspended its holdings for four consecutive months. what is the current value of gold?ubsthe office of the chief investment officer of wealth management responded to an interview with a reporter from the china times and said: "the rise in gold prices has not ended yet, and there is still room for further upward movement in the next 6-12 months. the target price is expected to be $2,600 per ounce by the end of the year and $2,700 per ounce by the middle of next year."

bridgewater sells about 189 million gold etfs

since buying three products into the top ten shareholders of e fund gold etf in the first half of 2022, bridgewater fund has carried out a large-scale "clearance" sale of gold etf for the first time.

according to the details of the top ten holders in the 2022 interim report of e fund gold etf, "bridgewater (china) investment management co., ltd. - bridgewater all weather enhanced china private equity investment fund no. 3", "bridgewater (china) investment management co., ltd. - bridgewater all weather enhanced china private equity investment fund no. 2" and "bridgewater (china) investment management co., ltd. - bridgewater all weather enhanced china private equity investment fund no. 1" have become the second, fifth and sixth largest holders of the fund, with holdings of 31.5935 million, 5.7018 million and 4.681 million shares respectively, and a total of 41.9763 million shares.

subsequently, in the next two years, the above three products of bridgewater fund have been among the top ten shareholders of e fund gold etf.

however, something unexpected happened in the first half of this year. the 2024 interim report of e fund gold etf shows that all three products of bridgewater all weather enhanced have disappeared from the top ten shareholders of the product. at the end of last year, the above three products of bridgewater were the second, seventh and eighth largest shareholders of e fund gold etf respectively, with the same holdings, holding a total of 41.9763 million shares.

that is to say, in the first half of this year, bridgewater fund sold a maximum of 41.9763 million shares of e fund gold etf.

the same thing happened in bosera gold etf. the 2022 interim report data of bosera gold etf shows that "bridgewater (china) investment management co., ltd.-bridgewater all-weather enhanced china private equity securities investment fund no. 3", "bridgewater (china) investment management co., ltd.-bridgewater all-weather enhanced china private equity securities investment fund no. 1", and "bridgewater (china) investment management co., ltd.-bridgewater all-weather enhanced china private equity securities investment fund no. 2" have become the second, fifth, and sixth largest holders of the fund, with holdings of 46.6248 million, 9.2942 million, and 8.7106 million, respectively, for a total of 64.6296 million shares. for two years, the holdings of the above three products of bridgewater fund have remained unchanged until the first half of this year, when bridgewater fund withdrew from the top ten holders of bosera gold etf.

bridgewater's withdrawal from huaan gold etf is gradual. huaan gold etf's 2022 interim report data shows that "bridgewater (china) investment management co., ltd.-bridgewater all-weather enhanced china private equity investment fund no. 3", "bridgewater (china) investment management co., ltd.-bridgewater all-weather enhanced china private equity investment fund no. 2", and "bridgewater (china) investment management co., ltd.-bridgewater all-weather enhanced china private equity investment fund no. 1" have become the third, eighth, and eleventh largest holders of the fund, with holdings of 82.6646 million, 14.4251 million, and 10.0597 million shares, respectively, with a total of 107 million shares. subsequently, "bridgewater (china) investment management co., ltd. - bridgewater all weather enhanced china private equity fund no. 1" disappeared from the top ten holders in the second half of 2022; "bridgewater (china) investment management co., ltd. - bridgewater all weather enhanced china private equity fund no. 2" disappeared from the top ten holders in the second half of 2023; "bridgewater (china) investment management co., ltd. - bridgewater all weather enhanced china private equity fund no. 3" also withdrew significantly in the first half of this year.

according to incomplete statistics, in the first half of this year alone, bridgewater fund's three all weather enhanced products sold a maximum of approximately 189 million gold etfs.

in the view of industry insiders, bridgewater fund's liquidation of domestic gold etfs may be based on a comprehensive consideration of the current economic environment, market strategies and the performance of different assets. bu yili, a researcher at paipai.com wealth, told a reporter from the china times that in the current economic environment, other assets such as stocks and bonds performed better when inflation was lower than expected, while gold performed worse than expected. at the same time, bridgewater fund's strategy in the chinese market also shows its emphasis on different asset allocations, so it may reallocate funds to other domestic assets. in addition, bridgewater fund focuses on maintaining the robustness of its asset portfolio under different economic environments and adjusts its allocation according to market conditions. the above factors led to bridgewater fund's "liquidation" sale of gold etfs in the first half of this year.

can gold still be bought?

looking ahead to the future market, what is the value of gold allocation?

in the view of the ubs wealth management investment director office, the rise in gold prices has not ended, and there is still room for further upward movement in the next 6-12 months. "gold has hit new highs this year and outperformed major stock indexes, reaching $2,500/ounce earlier than expected. but we reiterate our bullish view on gold, and expect the target price to be $2,600/ounce by the end of the year and $2,700/ounce by the middle of next year." ubs wealth management investment director office told the china times reporter.

as for the reasons behind the above views, the office of the chief investment officer of ubs wealth management explained that exchange-traded funds (etfs) have been withdrawn on a large scale, which is the first time since april 2022. traditionally, the direction of etf fund flows is negatively correlated with interest rate trends, that is, when government bond yields fall, gold demand (through etfs) will rise. as the federal reserve is expected to start cutting interest rates in september, more etfs are expected to see inflows, as is speculative demand.

in addition, another important reason for being optimistic about the trend of gold prices is the forecast of central bank buying. the office of the chief investment officer of ubs wealth management believes that although the momentum will slow down from the record level in the first half of this year, central bank buying is expected to continue until 2025. "although prices are generally not the key to central bank buying and selling, the monetary authority of singapore and the people's bank of china have recently sold a small amount of gold. however, china said it has kept its gold reserves unchanged for the third consecutive month. as the proportion of gold in overall foreign exchange reserves is still low, coupled with the trend of de-dollarization, it is expected that the central bank will buy 900-950 metric tons of gold this year. we believe that the inclusion of hedging tools such as gold in the portfolio will help manage high uncertainty, and it is most appropriate to include about 5% of gold exposure in a dollar-balanced portfolio."

bu yili also pointed out that against the backdrop of the federal reserve's interest rate cuts, coupled with the normalization of geopolitical risks, tight supply and demand, continued gold purchases by global central banks, and challenges to the u.s. dollar's status as a global reserve currency, market risk aversion remains high, and therefore gold prices still have potential to rise.

at the same time, industry insiders are alert to the risks behind it. bu yili stressed that gold has accumulated a large increase, and factors such as the fed's interest rate cut have been reflected in advance. it is expected that gold will most likely continue to fluctuate at a high level in the short term.