Monitoring ETF holdings
Outflows from ETFs led to an ~28% fall in gold prices in 2013—selling a combined 881 tons of gold. As a result, it’s important for investors to monitor changes in ETF holdings.
ETFs hold substantial amounts of physical gold and silver. It’s important for investors to track any sustained or significant buying or selling activity by these ETFs.
GLD holdings surge
The SPDR Gold Shares (GLD) is the world’s largest gold-backed ETF. It saw the biggest single day gain in over four months. It gained 1.4% to reach 717.5 tons on Thursday, January 15. This shows that investors’ confidence in gold is improving. It’s improving against a backdrop of economic uncertainty in global markets—especially Europe.
Current ETF holdings
Current ETF holdings track holdings of 14 known gold ETF holdings. Overall, gold holdings in ETFs were 1,608.1 tons as of January 15. This is a rise of 12.5 tons from the previous day. The gain is the highest in a single day since September 2012. On January 14, holdings touched 1,595.6 tons. This is the lowest value since April 2009.
The iShares Silver Trust ETF (SLV) tracks the current ETF holdings for silver. Silver ETF holdings also surged after the move. The holdings increased by 2.88 million ounces on January 15. They increased by 1.03 million ounces on January 16 to reach 625.4 million ounces.
Impact on precious metals’ prices
An increase in precious metal ETF holdings boosts investors’ confidence in precious metals. This supports precious metals’ prices. This is positive for stocks like Goldcorp (GG), Barrick Gold Corp. (ABX), Newmont Mining Corporation (NEM), Kinross (KGC), Yamana Gold (AUY), and Silver Wheaton (SLW). It’s also positive for ETFs—like the Gold Miners Index (GDX).