SPDR Gold Shares (NYSEArca: GLD), the world’s largest bullion-backed ETF, could experience further redemptions totaling up to 4 million ounces, or nearly 125 metric tons of gold, after already losing 300 tons since the start of the year, according to Deutsche Bank analysts.
“We expect that the bulk of the drawdown comes from institutional investors rather than retail investors,” Deutsche Bank said, according to a Bloomberg News report. “If in fact only institutional selling is occurring in the gold ETF then we expect that nearly two-thirds of the selling that is likely has probably already passed. As SPDR is roughly half of total physically backed ETFs, this could imply a further 4 to 8 million ounces selling if macro fundamentals continue to move against gold.”
That means all gold ETFs could experience an additional 250 tons worth of selling.
Other bullion-backed ETFs include iShares Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL).
Gold futures were lower Wednesday morning to trade just above $1,400 an ounce.