Gold funds’ bullion holdings are down slightly from the record level reached in December. [Are ETF Flows Sending a Warning Signal on Gold?]

Gold ETFs may indeed be a better indicator of how long-term investors are viewing the precious metal. For example, ETFs didn’t see big outflows during the sharp sell-offs that hit gold in the back half of 2011.

“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,” ETF Securities noted in a recent report. [Gold ETF Investors Say Pullback is ‘Excessive’]

Gold ETFs were down slightly on Wednesday as markets awaited the Federal Reserve announcement on interest rates. [Gold ETFs Battle Technical Resistance; All Eyes on Fed Decision]

ETFS Physical Swiss Gold Shares (NYSEArca: SGOL)

Full disclosure: Tom Lydon’s clients own GLD.