Money flows to GLD
The performance of gold affects the world’s largest gold-based fund, the SPDR Gold Shares (GLD). With the physical demand for gold weak and the paper gold much in circulation, the SPDR Gold Shares has risen about 20.3% year-to-date. Read Paper Gold in Demand: Investors Shun Physical Gold for more on physical gold demand. The assets in this fund were the highest since December 2013. Investors have rushed back into gold since the year started after declining prices for the past three years.
Since the beginning of the year, ~148 tons have been invested in the GLD fund, which is equivalent to ~17 days of newly mined global gold production. According to the data compiled by Bloomberg, the holdings in the SPDR Gold Shares rose to 20.8 metric tons on Monday, May 2, the biggest one-day expansion since 2011. About $7.1 billion has been poured into the SPDR Gold Shares so far in 2016, the most any ETF has witnessed.
The GLD fund has jumped 4.4% over the past one month. Other funds that also heavily depend on the precious metals include the Direxion Daily Junior Gold Bull 3X (JNUG), the Global X Uranium ETF (URA), and the SPDR S&P Metals and Mining ETF (XME).
Global fear likely impacted the GLD fund flow as well. The fund flows into GLD indicate an upward path for gold. Over the last three years, the significant outflows from the gold ETFs have been a major contributor to the decline in the gold price from its 2011 peak.