Gold ETF sales continue in May

Gold sales through exchange-traded products came to $6 billion last month as investors put more money into stocks and bonds, ETFGI Ltd. said.

The outflow for gold in May pushed the total for the first five months this year to $24.2 billion, compared with gains of $3.2 billion for the same period last year, according to data provided by e-mail from London-based ETFGI. Commodity outflows were $6.7 billion last month compared with $25 billion added to stock ETPs and $3.1 billion in fixed income.

Gold outflows came on top of an $8.8 billion cut in April when the metal slid to a two-year low and entered a bear market. BlackRock Inc. said the April gold sales were a record. Investors cut gold-backed ETP assets that reached an all-time high in December as faith in the metal as a store of value waned after inflation failed to accelerate and confidence mounted that the U.S. economy was improving.

Gold prices that rallied for 12 years in the best run in at least nine decades are down 16 percent this year while U.S. equities climbed to a record.

The S&P GSCI gauge of 24 commodities dropped 2.7 percent this year and the MSCI All-Country World Index of equities gained 6.9 percent. Treasuries are down 1.2 percent, a Bank of America Corp. index shows.

Commodity ETP outflows last month were down from $9.4 billion in April, according to ETFGI, which is managed by Deborah Fuhr, formerly of BlackRock. All ETP assets climbed to a record $2.14 trillion last month, ETFGI said.

Source: http://business.financialpost.com/2013/06/05/gold-etf-sales-continue-in-may/

Gold ETFs: Six Straight Months of Outflows

After consecutive years of higher gold prices, traders have finally begun letting go of the precious metal, with gold exchange traded funds experiencing their sixth straight month of outflows.

The SPDR Gold Trust (NYSEArca: GLD), the largest gold-related ETF, lost $2.9 billion in assets over May, according to IndexUniverse. Meanwhile, the ETFS Physical Swiss Gold (NYSEArca: SGOL) shrunk by $89.4 million and the iShares Gold Trust (NYSEArca: IAU) saw $371.5 million in outflows.

Overall, gold exchange traded products saw $5.7 billion in outflows last month, bringing year-to-date redemptions to $23.9 billion, according to BlackRock research note. Total gold ETP assets now sit at $96.2 billion, or 31.9% lower from the $141.2 billion at the end of 2012.

BlackRock analysts attribute the rapidly declining interest in gold to the growing speculation that the Federal Reserve’s monetary easing policies could end in the near term as the economy improves, which would force up interest rates. Consequently, a stronger U.S. dollar, greater demand for equities and shift away from traditional “safe haven” assets.

Gold futures were trading around $1,397 per ounce Tuesday.

Gold prices dipped below $1,400 Tuesday on concerns that India, the largest consumer of gold, would restrict imports, reports Lara Denina for Reuters.

“The news that the RBI will curb imports of gold by agencies has weighed prices down today as it is a wider restriction and could imply lower imports of gold into the country,” Societe Generale analyst Robin Bhar said in the article.

Despite recent correction in gold, investors should not shy away from the asset class altogether.

“While gold has historically been seen as a potential cash alternative in periods of economic uncertainty and a hedge against inflation concerns or a weakening dollar, many invest in gold as a long-term holding due to its diversifying properties,” BlackRock said. “Gold has historically shown little to no correlation with other major asset classes, including commodities, and gold is a beneficiary of negative real interest rates which have persisted for some time in many developed economies.”

For more information on gold, visit our gold category.

Max Chen contributed to this article.

Full disclosure: Tom Lydon’s clients own GLD.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

Source: http://www.etftrends.com/2013/06/gold-etfs-six-straight-months-of-outflows/

Gold ETF Traders More Bullish After Recent Sell-Off

Despite growing uncertainty over Fed easing and declining gold exchange traded funds, gold traders are now the most bullish in a month, arguing that the stimulus must flow until the economy recovers.

According to a Bloomberg survey, twelve analysts predict gold prices to rise next week, with nine bearish and eight neutral, the highest proportion of bulls since the end of April, reports Nicholas Larkin for Bloomberg.

“Gold should still be in demand as an alternative currency,” Daniel Briesemann, a commodities analyst at Commerzbank AG, said in the article. “The quantitative easing by central banks should lead to a depreciation in rates for major currencies and in the end should also lead to some inflation concerns, although this is not an issue at the moment. As long as institutional investors are selling gold ETP holdings, this will probably outweigh robust retail demand.”

Gold futures were 0.7% lower Friday, falling for the third time in four days after the Federal Reserve hinted at scaling back monetary stimulus. However, gold is set for its first weekly gain in three weeks.

Gold-related ETFs dumped 467 metric tons of physical gold holdings valued at around $20.9 billion as investors exited gold positions amid improving economic conditions. The SPDR Gold Shares (NYSEArca: GLD), iShares Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) have declined about 16.9% year-to-date.

Meanwhile, the U.S. Mint sold 209,500 ounces of gold coins last month and 62,000 ounces in March. So far this month, 52,000 ounces of gold coins were sold.

Additionally, global central banks are showing interest in boosting bullion holdings on the lower gold prices. According to the World Gold Council, global central banks can add 450 to 550 tons of gold this year after accumulating a record 534.6 tons in 2012.

Source: http://www.etftrends.com/2013/05/gold-etf-traders-more-bullish-after-recent-sell-off/