Top Gold ETF Holding Rises for First Time in 5 Weeks


". . .it would seem that the SPDR ETF holding has remained remarkably strong overall. . ."

The SPDR Gold Trust, the world's largest gold ETF with holdings greater than most central banks, recorded its first rise in its gold holdings in five weeks on August 21st, up by nearly a ton to 1,066.41 tons from the previous business day. Holdings had been flat for nine days prior. This is only the second increase in holdings since the record of 1,134.03 tons was reached way back on June 1st. The SPDR gold holdings had generally been declining since that date with a fall of 6%.

For the first half of the current year, holdings had shot up (from 780.23 tons at the beginning of January—a rise of 45.3% to the peak) due to uncertainty over the direction of the global economy and stock markets. But as confidence has returned to the markets along with a general perception that western economies and Japan are pulling out of recession, the appeal of gold as a safe haven has diminished. Since the beginning of June there has been a slow but steady slippage as some investors moved their holdings from gold into the general stock market or into other commodities, which were seen as performing better.

Even so, it would seem that the SPDR ETF holding has remained remarkably strong overall suggesting there is still considerable unease about the strength of the economy and even though the gold price has remained range bound between $930 and $960 in recent weeks. The latest small increase in the ETF holding is not yet significant in this respect, but if there is any continuation of increases, even if only small ones, it will indicate that many big investors are still hedging their bets and maintaining gold as a significant part of their investment portfolios despite the recent big rises in the Dow and the FTSE. Many will also be hanging onto ETF holdings as a dollar hedge.

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