Zhao Shande, a senior strategist at a Hong Kong-listed company (Value Partners ETF firm), recently discussed the impact of rising US interest rates on the economy. He stated that the gradual increases in US interest rates by the Federal Reserve will likely lead to a downturn in the US economy and subsequently result in higher gold prices.
Shande predicts that the price of an ounce of gold will reach US$2,300 in the near future. As a result, he advises investors to consider expanding their gold holdings rather than withdrawing funds from US equities and similar assets.
In Shande’s opinion, genuine gold ETFs are the most suitable investment option for individuals looking to invest in gold due to their transparency and ability for free buying and selling, providing investors the opportunity to diversify their holdings.
He also emphasized that the performance of physical gold ETFs closely aligns with the price of gold, while the performance of gold mining company ETFs is driven by the rise and fall of gold mining stocks, rather than the price of gold itself.
Shande also highlighted the potential risks associated with leveraged gold ETFs, emphasizing that while short-term gains might be possible, long-term returns are significantly lower than those of actual gold ETFs.
He also mentioned that the only gold exchange-traded fund available on the market that holds physical gold in Hong Kong is the Value Gold ETF (3081) from Value Partners Group. The company reportedly holds about three tons of actual gold bars in a precious metal storage warehouse in Hong Kong. This physical gold is utilized before being tokenized, which according to Shande, enhances the legitimacy and reliability of the gold ETF.
Interestingly, Shande expressed an interest in releasing exchange-traded funds (ETFs) tied to digital assets and tokens in the future. He believes that the growth of virtual assets will be supported by the orderly management and maturation of the bitcoin market.
The insight into Shande’s plans for digital asset and token tied ETFs, as well as the link to the recent guidelines for stablecoin launch in Hong Kong, demonstrate his forward-looking approach to investment opportunities in the evolving financial landscape. His intention to explore alternative investment options not only showcases strategic thinking but also an understanding of the changing market trends and investor preferences. This forward-looking approach and adaptability to market changes positions Shande and his firm as innovative and equipped to navigate the shifting financial landscape.
