Deutsche Bank AG stated, holdings in the SPDR Gold Trust (GLD), the largest gold-backed exchange-traded product, will perhaps fall another 2 million to 4 million ounces as most institutional investor sales have happened.
According to the provider and data compiled by Bloomberg, the product’s assets fell around 9.7 million ounces since mid-December, when global gold ETP holdings touched a record. Deutsche Bank reported today, around 50% of the SPDR’s metal is owned by institutional investors, with the others held by retail investors. One-third of institutions holding bullion will most likely keep it.
Deutsche Bank stated in the report “We expect that the bulk of the drawdown comes from institutional investors rather than retail investors,” and added “If in fact only institutional selling is occurring in the gold ETF then we expect that nearly two-thirds of the selling that is likely has probably already passed. As SPDR is roughly half of total physically backed ETFs, this could imply a further 4 to 8 million ounces selling if macro fundamentals continue to move against gold.”
Data accumulated by Bloomberg shows, global gold ETP holdings dropped 15% this year, after rising every year since the first product was listed in 2003. Prices that supported as much as sevenfold in the past 12 years entered a bear market last month as inflation failed to rush and mounting confidence that the U.S. will lead a global economic recovery helped drive the S& P’s 500 Index of equities to a record.