Today’s surge in gold is being attributed to this news.
Gold prices jumped Tuesday, as interest in gold ETFs could be strong from China, where investors face negative real interest rates on bank deposits and want to hedge against inflation.
Lion Fund Management Co. received permission to invest in exchange-traded gold funds outside the country, making the fund the first of its kind for mainland China, according to a statement posted on the Shenzhen fund provider’s website.
Seems possible that this will create some buying power.
Bear in mind, though, that the impact of the original SPDR Gold Trust “GLD” ETF has been overblown — short version: the introduction of the fund in late 2004 didn’t lead to any historical obvious distortions in the price — so don’t assume this is a chip-shot.
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