Wednesday, May 29, 2013

"Central Banks’ Gold Buying ‘a Drop in the Ocean’ of ETF Sellers" (GLD)

From Barron's Focus on Funds column:
The steady exit from gold exchange-traded funds is as good a barometer as any for today’s low investment appetite for the metal. But here’s another way of looking at the outflows: Versus the size of central-banks’ gold buying.

For some analysts, ETFs have grown so important that central banks’ activities are now something of an afterthought.

Commerzbank’s strategists lay out the numbers this morning. Central banks bought about 30 tons of gold during April. So far in May, investors have pulled out the equivalent of 117 tons from ETFs like SPDR Gold Trust (GLD) and iShares Gold Trust (IAU). They’ve yanked more than 290 since the start of the quarter, according to the same figures.

‘[T]he 30 tons or so of gold purchased by central banks in April – as we reported yesterday – thus appear to be but a drop in the ocean,” write the firm’s strategists in a morning note....MORE