Precious Metals – Gold

Gold has been hovering in the middle of a trading range for the past few trading sessions, while the most recent FOMC statement has been price supportive of precious metals and gold in particular.  While this is true, many economists have lowered their core 2013 inflation forecasts from 2% – 2.1% to 1.5% – 1.75% due mainly to the less aggressive indicators for the inflation of consumer basics.  Overall sentiment in the market is that the current regime of Asset Purchasing or QE is now set to begin slowing going into 2014. With the inclusion of the sound payroll numbers of April this year, the overall picture for Gold remains difficult to determine with a strong conviction.
Gold ETF’s are reducing their holdings with outflows of 736.5koz month to date.  This is on a nearly 5.5moz decline in gold holdings for Gold ETFs for the total month of April.  The Net Gold holding for Gold ETFs rests at 8.4moz, which are the lowest levels for Gold ETFs since April 2008.
Futures data indicates a small 0.2moz reduction in Net Longs at the end of April.  Short Gold Futures are the heaviest trade with a value of 13.3moz near the all time high.
The combined reduction in ETF net Physical Gold holdings and Heavy Short Positioning as reported by the CFTC continue to add pressure to the yellow metal.

Net Longs
4/22/13               8.61moz
4/30/13               8.38moz

Precious Metals ETF Holdings    
4/29/13            77.94moz
5/6/13              77.09moz
Change           –  0.85moz

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