“The other interesting thing they note, is that despite the resurgence in euro area risk aversion, it’s pretty notable (if not remarkable) that gold prices have remained unchanged over that period, something which is pretty visible on the ETF level,” FT Alphaville reports. “Indeed ETF gold holdings continue to decline quickly.”
Bullion holdings in gold ETFs fell about 7% during the first three months of 2013, a quarterly record.
ETFs have made it much easier to purchase gold without the costs of storing, transporting and insuring the metal. It’s difficult to quantify just how much the funds have contributed to gold historic rally but the recent outflows clearly signal the metal is falling out of favor with some ETF investors. [Do Record Quarterly Gold ETF Outflows Signal End of Rally?]
Charts from FT Alphaville.
Full disclosure: Tom Lydon’s clients own GLD.