uploads///SPDR Gold Shares GLD Fund Flow

Why GLD’s Funds Have Dried Up

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Nov. 17 2016, Published 1:26 p.m. ET

GLD shrinks

Precious metals’ recent diminishing returns have been evident in the fund flows of the popular gold-based SPDR Gold Shares ETF (GLD). GLD has fallen ~4% in the past five trading days as gold’s returns have plunged. GLD’s holdings have fallen close to 26 tons in the past few trading sessions.

Shareholders are liquating their holdings on fears of further falls, as interest rates seem to be due for a rise. The fund’s shares are shrinking at their fastest pace since April 2013. GLD now stands at 928 tons, still 45% above its seven-year lows as of the end of 2015. This amount is, however, GLD’s lowest since the Brexit referendum result in June 2016.

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Billionaire reduced holdings

According to regulatory filings, funds run by speculator George Soros cut their GLD holdings entirely between July and September’s end. October initially witnessed money flowing to gold, but this movement later reversed its course. 

According to SEC (Securities and Exchange Commission) data, the number of institutions that owned GLD stock rose as prices plateaued between July and September, but their average holdings shrank, and the number of private investors in the stock rose much faster.

Most of the time, a loss of confidence among market players results in an outflow of money from such famous funds.

Giant miners rebounded

On November 14, 2016, giant mining companies Goldcorp (GG), Barrick Gold (ABX), Newmont Mining (NEM), and Agnico Eagle Mines (AEM) rose 1.4%, 2.9%, 1.4%, and 2.3%, respectively. Combined, these four miners make up 24.6% of the fluctuations in the VanEck Vectors Gold Miners ETF (GDX).

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