CHINA GOLD: $1.3 Billion in 48 hours – The "Scared Money" Out of Game

[Igor Pereira]

We just witnessed the definition of "retail panic" on an industrial scale.

China's flow data shows that speculators who inflated the bubble last week just threw up their positions as violently as possible. The "cleaning" we expected happened and it was brutal.

By Igor Pereira Financial Market Analyst

Below is the analysis of record output numbers and why this marks the bottom of the well for Gold.

The graph is scary, but enlightening. Shows a complete reversal of feeling.

• The Daily Crash: The four largest gold-plated ETFs in China (Huaan Yifu, Bosera, E Fund and Guotai) recorded net outputs from $980 million Tuesday.

• Magnitude: This is the largest daily withdrawal ever recorded, being 2.5 times higher that the previous record set in May 2025.

• The Accumulated: Adding to Monday ($317 million), we had a total drainage of **$1.3 billion** in just two days.

This event perfectly illustrates the behavior of "Weak Hands".

• Euphoria: Last Wednesday, these same funds attracted a record of +$879 million in entries. They bought the top.

• The Panic: Less than a week later, they sold the fund. Tuesday's withdrawals disrupted a 10-day sequence of uninterrupted purchases.

• Reading: The feeling in Chinese markets is suffering drastic oscillations ("drastic swings"). That's not investment; it's emotional gambling.

For the professional investor, that's excellent news.

• The End of Foam: The speculative "hot money" came out. The market is no longer overbought or leveraged by Chinese amateurs.

• Transfer of Custody: Who do you think bought the $1.3 billion gold the Chinese sold in panic? The institutional banks (such as JP Morgan and Deutsche Bank, who advised "buy weakness"). The gold came out with weak hands and went to strong hands.

China's emotional volatility cleared the way.

My Vision: A record withdrawal after a market crash is a classic sign of capitulation.

1. The Fund: When retail sells in bulk with record loss, the market fund is usually marked there.

2. Opportunity: With the ETFs "light" again, the selling pressure is over. The next high leg will be built on solid foundations, not on Shanghai's short-term euphoria.

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Historically, 48 hours after a record withdrawal of ETFs, the price of gold tends to make a specific move. In Premium, we reveal the exact return statistics for the week following these capitulation events.

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