The world’s largest exchange-traded gold fund, SPDR Gold Trust, on Tuesday displayed its second-biggest percentage decrease in holdings this year, and is set to receive more losses if the decline in prices of gold continued.
SPDR holdings are carefully observed and are critical to gold prices as the fund holds around $40 billion value of gold at the present prices.
On Wednesday, Spot gold dropped 3.6% close to a three-year low of $1,230.29 an ounce as the strong U.S. economic data supported the Federal Reserve’s method of pulling back its stimulus.
On Tuesday from the day before, SPDR holdings dropped 16.23 tons, 1.65%, to reach 969.50 tons, their lowermost since February 2009.
The drop is the biggest this year since a 2.3% decline shown in mid-April, when spot gold prices decreased to the most in 30 years.
Gold prices have been dropping since the beginning of last week, losing 11.5%, as Ben Bernanke, Fed Chairman stated, the U.S. central bank is expected start slowing down the pace of its $85 billion monthly bond purchases at the end of this year.
Last Thursday gold ran below the $1,300 mark, fueling the rise in ETF losses.
Around 288 tons of gold were stored through all physically-backed gold ETFs the analysts said, surrounded by that price range.
SPDR Gold, in which John Paulson billionaire hedge fund manager is the biggest shareholder, has comprehended around 380 tons of losses this year, worth more than $16 billion at the present spot market price.
Keenan expects around 800 tons of losses all over gold ETFs in the current year.
The drop of gold is showing a weak reaction from Asian consumers and not repeating of the buying rage that was shown in April as India’s curbs on trade of the yellow metal and reintroduced worries around the Chinese growth hollow demand.