Hong Kong's first-ever gold exchange traded fund (ETF) on Thursday jumped over nine percent on its trading debut, as the price of the precious metal continued to break new records, with spot gold rallying to just below US$5,600 an ounce.

The "Hang Seng Gold ETF" was launched by Hang Seng Investment, a subsidiary of Hang Seng Bank, on Thursday morning.

The fund closely tracks the morning fixing price of gold per troy ounce announced by the London Bullion Market Association (LBMA), an international trade association based in the British capital.

It also comprises physical gold, with all gold bars stored at designated vaults located in Hong Kong.

Speaking at the fund's listing ceremony, Secretary for Financial Services and the Treasury, Christopher Hui, noted there's been robust demand for gold.

He added the listing of the local gold ETF marked a milestone for the SAR, as the government is determined to transform the city into a premier gold trading hub.

"As the first ETF in Hong Kong that supports physical gold redemption at a bank, it seamlessly blends the flexibility and liquidity of an ETF with the security of physical commodities," he said.

"This enables smooth trading, secure storage, and flexible redemption — all conducted entirely within Hong Kong," he added.

The treasury chief also noted the government aims to speed up and establish a central clearing system for gold in Hong Kong to drive market growth, after reaching a cooperation deal with the Shanghai Gold Exchange on Monday.

Hui added the gold central clearing system would be managed by the Hong Kong Precious Metals Central Clearing Company, which is wholly owned by the government.

Echoing Hui, Luanne Lim, executive director and chief executive of Hang Seng Bank, stressed that the first-ever local gold ETF would bring greater convenience and "peace of mind" for investors.

"It's the only product that allows investors to redeem physical gold directly at a bank, and that means all storage or trading and all redemption is conducted here in Hong Kong," she said.

"And we are not stopping here, we will be launching a tokenised class for this ETF, which will be the first non-money-market tokenised ETF in Hong Kong.

"This innovation will make gold investments even more accessible and relevant to a new generation of investors," she said.

Global gold prices have been on a bull run over the past two years as investors flock to "safe haven" assets amid geopolitical and economic uncertainties, and as central banks ramp up buying.

Gold vaulted above US$5,000 an ounce for the first time on Monday and was up more ⁠than 10 percent so far this week.