Fed Chair Shake-Up Looms! Spot Gold Crashes Below $4,450; Hang Seng Gold ETF (03170.HK) Plunges Over 13%

NewTimeSpace Wire: Gold prices suffered severe losses on February 2. London spot gold tumbled over $1,000 per ounce from its January 29 peak, crashing below $4,450—an intraday decline of 8.46%. Hang Seng Gold ETF (03170.HK) plummeted over 13%.

HKEX data shows Hang Seng Gold ETF (03170.HK) is a physically-backed gold exchange-traded fund launched by Hang Seng Investment Management on January 29, 2026, on the Main Board of the Hong Kong Stock Exchange. The product marks a significant milestone for Hong Kong's financial markets in advancing toward the Web3.0 era and stands as one of the most innovative gold allocation tools in the recent Hong Kong equity market.

The fund employs a physical asset-backed model, with each fund unit fully supported by physical gold bars stored in designated Hong Kong vaults. Based on pre-listing reference data, the net asset value per unit was approximately HKD 16, with a board lot size of merely 50 units—translating to an entry threshold as low as HKD 800. This represents a substantial reduction from traditional physical gold bar investments (typically requiring tens of thousands of dollars), offering retail investors exceptional accessibility.

On the news front, President Trump nominated Kevin Warsh as the next Federal Reserve Chair on January 30 (expected to assume office in May 2026, succeeding Jerome Powell). Given his hawkish stance during his 2006-2011 tenure as Fed Governor and cautious approach toward the size of the Federal Reserve's balance sheet, the nomination triggered a dollar rebound and gold selloff.

However, CICC (China International Capital Corporation) noted that this round of rapid gold price surge and subsequent crash has significantly deviated from traditional fundamental frameworks such as real interest rates. The core driving force lies in gold's partial substitution for dollar credit—specifically, the "de-dollarization" trend and gold's repositioning as the ultimate store of value. When gold prices touched $5,500 per ounce, corresponding to a point where total global gold market capitalization equaled the stock of U.S. Treasury debt, this historical watershed signaled structural loosening in the dollar-U.S. Treasury dual-pillar system established following the collapse of the Bretton Woods system.

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