Gold exchange traded funds have seen record outflows in assets under management with the funds themselves experiencing heavy reductions in physical bullion holdings.
Since the start of the year, gold ETFs have sold off 140 tones of gold, with February experiencing the largest monthly outflow of gold from ETFs on record, as investors become more confident in the global economy and shift money to riskier assets, reports Jack Farchy for the Financial Times.
“The acceleration in gold ETF outflows is worrying,” Joni Teves, precious metals strategist at UBS. Suki Cooper, an analyst at Barclays, said in the article, pointing to the current selling as “the key downside risk for prices.”
To put gold ETF holdings in perspective, collective ETF holdings outweigh all but U.S. and German central bank holdings. Gold held in ETF sponsor vaults could supply India’s jewelry market, the largest in the world, for over four years.
Gold ETFs lost a record $4.1 billion in assets under management over February. [Gold ETF Sees Over $5 Billion Outflow as Prices Slump]
Gold futures currently trade at around $1,590 an ounce. [Gold ETFs Suffer Largest Fall Since May 2012 on Dollar Strength]