The recovery in gold prices has lost steam in recent sessions as bullion-backed exchange traded funds continue to bleed assets. For example, physical gold holdings in metal ETFs such as SPDR Gold Shares (NYSEArca: GLD) have declined to a four-year low.
“There’s continuous liquidation on the ETFs which keeps gold under pressure. Sentiment is not that good,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers, in a Reuters article.
Bullion holdings in GLD fell to about 1,058 metric tons on Tuesday, the lowest since early 2009. [Gold ETF Asset Flows are a New Market Indicator]
So far this year, the world’s largest gold ETF has experienced net redemptions of $14.4 billion, according to IndexUniverse flow data.
“There’s a lot of betting against gold going on,” said Ben Traynor, chief economist at BullionVault, in a MarketWatch report.