Why investors should watch ETF holdings closely


Dec. 4 2020, Updated 10:53 a.m. ET

Monitoring ETF holdings

Outflows from exchange-traded funds (or ETFs) led to an ~28% fall in gold prices in 2013. They sold a combined 881 tons of gold. As a result, it’s very important for investors to monitor the change in ETF holdings.

The ETF’s decision to buy or sell would be motivated by one or more factors that impact gold prices. The sheer holding size makes it important to take a closer look at the ETF’s buying or selling trend. In this part of the series, we’ll discuss the recent trends in ETF holdings. We’ll also look at how the trends impact gold prices.

What’s the current ETF holding trend?

The total known ETF holdings include 14 gold ETF holdings. It includes the largest physical gold-backed ETF—the SPDR Gold Shares (GLD). Global ETFs backed by physical gold saw outflows of 37 tons in September. There has already been an outflow of 14 tons of gold in the first 17 days of October.

Total holdings were 1,667 tons as of October 17. Gold holdings in ETFs were steady this year—compared to last year. However, recent outflows suggest that investors are moving into other risky assets.

Impact on gold prices

The recent outflows in ETFs over August, September, and October are negative for gold prices and gold stocks—like Goldcorp Inc. (or GG), Barrick Gold Corp. (ABX), Newmont Mining Corporation (NEM), Kinross (or KGC), Yamana Gold (AUY), and ETFs like the Gold Miners Index (GDX).

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