Since mid-February, about 550 metric tons of gold have flowed out of ETFs. “That’s the equivalent of saying we’ve added to the gold market an additional 11% on top of 2012’s gold (mine) output,” said Natixis analyst Bernard Dahdah in a Reuters report.
“We bought gold for two reasons – because we were worried about the inflationary impact of policy and because we thought the financial system was going to fall apart,” added Sean Corrigan, chief investment strategist at Diapason Commodities Management, in the article. “Although it may be completely the wrong judgment, the market has decided that none of those at the moment is a concern.”
Silver ETFs have suffered even bigger losses than gold funds in the second quarter. The iShares Silver Trust (NYSEArca: SLV) was down over 4% on Tuesday, taking its quarter-to-date loss to 34%.
SPDR Gold Shares
Full disclosure: Tom Lydon’s clients own GLD and SLV.