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Giant Gold ETF the GLD Shrinks Fastest Since 2013 Crash on Trump's 'Positive Growth' Policies

Tuesday, November 15, 2016 7:39
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(Before It's News)

Adrian Ash is head of research at BullionVault, the world-leading gold trading & ownership service online…

GOLD ETF holdings have shrunk at their fastest pace since the price crash of spring 2013 since Donald Trump's US election victory, with the world's largest gold-backed trust fund starting Tuesday almost 3% smaller as price steadied from their worst drop in 2 years.
 
Down some 26 tonnes in the last 3 sessions, bullion held to back the SPDR Gold Trust (NYSEArca:GLD) has shrunk as shareholders have liquidated stock, falling the most since April 2013, when the gold price crashed at its worst pace in 3 decades.
 
That cut the GLD's backing to 928 tonnes, still 45% above end-2015's seven-year lows, but the smallest holdings since June's UK Brexit referendum result.
 
Gold prices ended Monday in London more than 5% lower from Wednesday afternoon in Dollar terms – the metal's sharpest 3-day drop since October 2014 at the global benchmarking auction.
Chart of the SPDR Gold Trust (NYSEArca:GLD) bullion backing vs. spot price
 
“Reduced regulation, lower corporate taxes, faster economic growth in the short term are all positive factors fundamentally,” says Justin Oliver, deputy head of investment at the £12 billion Canaccord Genuity Wealth of Trump's stated policies.
 
“There remains an appetite to use equity market weakness as a buying opportunity.”
 
Funds run by speculator George Soros cut their GLD holdings entirely between July and end-September, new regulatory filings show.
 
Data gathered by Nasdaq.com from all 13F filings – reports on holdings of listed US equities which managers of $100m or more must make to regulators the SEC – show that the number of institutions owning GLD stock grew as prices plateaued between July and September, but their average holding shrank and the number of private investors in the stock grew much faster.
Table showing institutional fund managers' holdings of the SPDR Gold Trust (NYSEArca:GLD)
Total gold ETF holdings worldwide rose 1.1% in October, data gathered by market-development organization the World Gold Council showed Tuesday, with growth in cheaper vehicles the iShares IAU and ETF Securities' products outweighing a 5-tonne drop in the GLD.
 
“Another volatile session [Monday] with huge turnover,” says Swiss refining and finance group MKS Pamp's trading desk, noting “a healthy $6-8 premium” on the Shanghai Gold Exchange, rising above $10 per ounce by the close – some 4 times the typical incentive for new imports to the world's No.1 mining and consuming nation.
 
Former No.1 consumer India has meantime seen gold bullion imports leap to perhaps $1 billion over the last 6 days according to specialist analysts GFMS, since the Government of Narendra Modi suddenly demonetized India's largest banknotes, worth some 86% of all currency in circulation.
 
Retailers and jewelers report a 23-fold spike in sales of gold the night of last Tuesday according to The Hindu, when the sudden and controversial decision spurred a rush to buy gold with the expiring notes.

Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK’s leading financial advisory for private investors, Adrian Ash is the editor of Gold News and head of research at BullionVault – winner of the Queen’s Award for Enterprise Innovation, 2009 and now backed by the mining-sector’s World Gold Council research body – where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2010

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

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