Still, gold ETFs have only seen slight outflows recently. In other words, there isn’t even a hint of panic.
Gold ETF bullion holdings rising to a recent high despite the price pullback to $1,600 an ounce shows long-term investors are staying the course, some analysts say. [Gold ETF Investors Say Pullback is ‘Excessive’]
“Global ETF investor positions have continued to trend up in both gold and silver, reflecting the fact that long term price supports such as negative real interest rates, currency debasement and sovereign/financial sector default risk, and rising emerging market/central bank demand remain embedded in the 2012 outlook,” said Daniel Wills and Nicholas Brooks at ETF Securities in a weekly precious metals update.
However, the large price swings in gold recently may have shaken out some skittish investors.
“Gold prices have been moving so violently that its safe-haven, store-of-wealth status has been dented somewhat,” said VM Group analyst Carl Firman, Reuters reported. “I think you have seen some of the more nervous investors in the ETFs pull out because of that.”
The direction of the U.S. dollar will have a big impact on gold ETFs in 2012. PowerShares DB US Dollar Index Bullish (NYSEArca: UUP) is an ETF hitched to the greenback’s movements against a basket of currencies.
Gold ETF Bullion Holdings (Tons)
SPDR Gold Shares
Full disclosure: Tom Lydon’s clients own GLD.