After a steep sell-off earlier this year, fund flow data suggests gold exchange traded funds are consolidating and shifting on fundamentals, with many short-term speculators sitting on the sidelines.

According to ETF Securities, gold exchange traded products, which includes ETFs and exchange traded notes, experienced outflows of $4.2 billion in the third quarter, significantly lower than the $19.6 billion in outflows recorded over the second quarter, reports Myra P. Saefong for MarketWatch.

Nick Brooks, head of global research and investment strategy at ETF Securities, argues that the “bulk of shorter-term tactical money that went into gold over 2011 and 2012 has now been cleared” and gold ETP assets are closer to 2010 levels.

The SPDR Gold Trust (NYSEArca: GLD) was the least popular ETF in the third quarter, with $2.6 billion in outflows, according to IndexUniverse data. However, the decline in assets in the past three months was lower than the $11.6 billion in outflows over the second quarter. [Gold ETFs Pick Up After Touching Two-Month Low]

Adam Koos, president of Libertas Wealth Management Group, is “encouraged by the recent consolidation and potential bottoming in gold ETFs.”

“Where hope floats is in the short term, as gold ETFs have started consolidating — a potentially bottoming process — which began in July,” Koos said in the article. “We still have yet to see whether the break-out from here will be a bullish or bearish one.”

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