Hong Kong investors triple gold holdings in rush to haven asset!
Affluent investors in Hong Kong have nearly tripled their allocation to gold amid economic and geopolitical uncertainties, according to an HSBC survey.
Individual investors in the city with US$100,000 to US$2 million in investible assets had allocated 11 per cent of their portfolios to gold and other precious metals, up from 4 per cent a year ago, according to the survey published on Thursday. On the mainland, wealthy investors had increased their gold holdings to 15 per cent compared with 7 per cent a year earlier.
The trend mirrors that of their global peers, with their share of investments in gold rising by 6 percentage points to 11 per cent over the past year.
Gold was trading at US$3,356.61 per ounce on Thursday, up 28 per cent year to date. The precious metal hit an all-time high of US$3,500 in April. The rally followed sweeping tariffs imposed by US President Donald Trump against all major trading partners, which sent global markets tumbling and prompted a rush for haven assets.
In May, central banks around the world added a total of 20 tonnes to their gold reserves, according to the World Gold Council. The National Bank of Kazakhstan added seven tonnes, while the People’s Bank of China added three tonnes.
The gold rush also prompted several Chinese gold miners to raise funds in Hong Kong amid a surge in initial public offerings in the city. Shares of Chifeng Jilong Gold Mining, the largest non-state-owned gold producer in China, have nearly doubled from their offer price of HK$13.72 since the company’s debut in March.
HSBC surveyed more than 10,000 individual investors from 12 markets – including the US, the UK, mainland China and Hong Kong – in March.
Investors globally have reduced their allocation to cash and cash equivalents – short-term, highly liquid investments that can easily be converted to cash – to 20 per cent, compared with 33 per cent a year ago.
In Hong Kong, investors cut their allocation to cash and cash equivalents from 34 per cent to 20 per cent. They also cut their positions in fixed income and bonds.
Aside from gold, they increased their exposure to cryptocurrencies and equities by 3 percentage points each, and to real estate by 2 percentage points.
In terms of financial products, 47 per cent of those surveyed in Hong Kong said they owned stocks and 32 per cent said they had time deposits.
Beyond the local market, Hong Kong investors said they would prefer investing in mainland Chinese equities, followed by the US and Asia-Pacific markets, over the next 12 months.
In contrast, their global peers were more confident in US markets, followed by Europe and Asia-Pacific.
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