SPDR Gold Shares (NYSEArca: GLD) was on track for a gain of 4% this week to recover some of the steep losses the fund suffered the previous three weeks, although investors continue to pull cash from bullion-backed ETFs.
Gold prices were set for the biggest weekly gain in a year.
“Sentiment, though buoyed, was still on an unsure footing with investors in exchange-traded funds heading for the exit, highlighted by further fund outflows on potential central bank sales and uncertainty over U.S. monetary stimulus,” Reuters reports.
Bullion holdings in GLD are at their lowest levels since September 2009. The ETF holds about 1,090 metric tons of gold valued at $51.6 billion. GLD has experienced net outflows of $12.8 billion year to date, according to IndexUniverse data.
“Heavy disinvestment from ETF investors is being offset by strong physical demand in key markets such as India and China, but neither of these is likely to continue indefinitely, and which runs its course first could determine whether the (gold) price moves $100/oz higher or lower,” Macquarie analysts said in the Reuters story.
Turning to the major U.S. stock indices, the S&P 500 was poised for a 1.8% weekly gain in afternoon trade Friday while the Dow added 1.2% and the Nasdaq Composite climbed 2.3%.