In the previous large sell off over the final two months of 2011, gold prices dipped 13% but ETF holdings rose.
“The latest collapse in gold ETF holdings stands in sharp contrast to our assumption that ETF positions were likely driven by longer-term allocation rather than short-term trading,” Damien Courvalin, analyst at Goldman Sachs, said in the article.
Nevertheless, Nicholas Brooks, head of research at ETF Securities, believes that “there are still very strong core holders of gold ETPs [exchange-traded products] as a hedge against currency debasement and potentially unexpected inflation. Those guys are still there and they’re holding on.”
Some physically backed gold ETFs include:
- SPDR Gold Shares (NYSEArca: GLD)
- iShares Gold Trust (NYSEArca: IAU)
- ETF Securities Swiss Gold Shares (NYSEArca: SGOL)
For more information on gold, visit our gold category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own GLD.