Bullion holdings of gold exchange traded funds are sometimes used to gauge the demand and sentiment for the precious metal. However, the relationship between ETF holdings and the price of gold isn’t clear-cut and may not be a reliable indicator for short-term moves, according to Wall Street analysts.

Global gold ETFs hold about 2,350 metric tons of bullion. More than half of that resides in the largest precious metal ETF, SPDR Gold Shares (NYSEArca: GLD). It holds roughly 1,250 tons of gold, or over 40 million ounces, valued at nearly $67 billion.

ETF bullion holdings “dwarf those of all but the most gold-addicted central banks,” WSJ.com’s The Source blog reports Wednesday.

However, the correlation between gold prices and ETF holdings “is much lower than that between gold and its futures market, which is also a lot more volatile,” according the report, which cited research from analysts at Nomura.

“This suggests that ETF holdings might provide us with a better perspective on how long-term investors view the prospects for gold and, by extension given gold’s last-resort role, their views on everything else,” WSJ.com points out. “Nomura also noted that, when it comes to big shifts in gold ETF holdings, large rises have a strong relationship with rises in the gold price, while the relationship with falls in holdings is much weaker. For gold futures, we find the inverse. Big rises there a have weak relationship with price action, while large falls may well indicate that gold is heading south.”

ETFs have played a role in the metal’s historic rally, but now some are wondering whether the funds could speed a decline in gold prices on the way down. ETFs can be bought and sold during the day. [Could Gold ETFs Worsen a Price Decline?]