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No LOVE For GLD
Gold hasn’t been the flavor of the month for a while now, and the asset ‘managers’ at the SPDR Gold Shares ETF, trading with GLD as ticker symbol are definitely feeling the pain. From being the world’s largest ETF available just a few years ago (with a value that was even higher than the S&P ETF), GLD has seen 2/3rds of its assets under management been withdrawn.
Indeed, the current total amount of gold held by the ETF is just over 700 tonnes with a total value of approximately of just $26.7B, compared to almost $80B in 2011. This means that if GLD indeed holds all the gold in physical form in its bank vaults, it sold approximately $50B worth of physical gold in the past few years. Not only does this raise the question if the most recent drop in the gold price was some sort of self-fulfilling prophecy, but it also raises the question who ended up with the gold, because, as you know ‘for every seller, there is a buyer’.
The sentiment remained negative in the past few weeks and months as in May alone, the ETF saw an additional outflow of almost $1B. And nobody will argue with the fact the more the Gold ETF gets out of favor, the closer to the bottom we are. Remember GLD’s value peaked at almost $80B in 2011? Well, just two weeks after reaching the record high, the gold price topped and only went downhill from there on.
All weak hands have now reduced their exposure to gold through the Gold Shares ETF, only the real believers are still holding the ETF, so the selling pressure should per definition decrease as there are less weak and nervous hands. On top of that, we see some positive chart-technical signs with the money flow index once again flirting with the lows we only saw before two nice break-outs in the past 12 months (see previous chart).
The next few weeks and months will be very important for gold, as some market analysts are expecting one final dip to $1080/oz before starting to move up again. There’s only one thing you can be sure of, a lot more shit will hit the fan shortly as Greece is in a technical default, the USA still plans to increase its interest rates despite the fact the underlying economy isn’t strong at all. Throw in Russia’s and China’s continues hunger for gold in the mix and you’ll understand why we think it’s more likely gold will move up instead of down in the medium-term.
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Whether gold is added to or withdrawn from an open-ended ETF like GLD is merely a function of whether the shares trade at a premium or a discount to NAV intra-day. That's all there is to it. In that sense it is certainly a sentiment indicator of sorts. The amount of gold involved is a pittance compared to the total size of the gold market, it has no effect on gold prices whatsoever.
these zh comments are so stupid. Years ago I used to use this blog then stopped for a few years. Im gonna stop again. Your all a bunch of alex Jones's mike malloneys. Fact G and S are in the toilet 4 years now. when all the touts said they were going to the moon. The last G and S bear lasted 20 years. Were only 4 years in maybe we got another 16. Bye
just one question before you fuck off, where do you think the price would be right now without the frequent repeated illiquid-hours mass selloff slam-down abject obvious price manipulation events?
Because you cant slag off the fundamentals expoused by the jones/maloney/ZHers without accounting for that - not just the fiduciary dutiless drops, but the follow-on effect that has on the sentiment of less savvy traders/investors, and then the follow on that has on the ammunition it gives to dickhead mainstream media gold trolls.
Absent all that distortion, I reckon you have a hard case imagining gold at less than $2000.
so go suck jim cramer's cock if you think his ejaculation in your mouth keeps you better informed than ZH
You will be back. This group therapy shit is an addiction. You aren't leaving unless you replace it with something better.
I agree that holding physical is vastly superior to paper, and that GLD is a very adroit way of the banksters to play their paper scams, but let's be honest.
At this time, and probably for a long time to come, if you want to go to the store and buy a loaf of bread, you still have to go through considerable hassle to obtain paper ( and do it at a loss) to buy it. Fact.
We gold bugs may be right about what value without counterparty means, but as the saying goes: it's hard to soar like an eagle when you're stuck with a bunch of turkeys.
GLD is evil shit. It needs to die. It diverts investment from physical bullion and PM equities markets. They are at least producers or potential producers. Futures markets also gotta stop the paper payoff bullshit. If you play in the metal you need to have backing in metal or paydirt to preserve confidence in the markets.
They pay you in cash, not gold.
Thats all you need to know about GLD.
So, three parallel universes are running:
1. In Paperland, speculators think they can make a buck on the index movement of GLD shares, unsure of what those shares represent. Their profits, if any, will be paid in paper;
2. In QE Land (US and EU), governments continue to live on fiat currency and increasing debt, even though their debt levels are already far beyond any hope of ever paying off, let alone servicing if interest rates go up; and
3. In Bullion Land, China, Russia, and India are buying up every bit of physical they can get, no doubt enjoying the low prices created by the Paperland market players.
Sounds about perfect. What could possibly be wrong with this?
I do some proprietary cycles stuff and I am a buyer at every one of those
lows exactly over time. A couple times I was a day or two early and the last
throwdown low could have been $40 better than my price. So I only claim to
get with a day or so.
Mark on calendars, and I dont claim accuracy that far out I should be within the
month,
a final low, it could be higher or lower low it should the for real last time it turns up for
good, is 40 weeks, 10 months, next April.
Some might know Armstrong's date from his gold report I dont.
Gold seasonality should have another low Sep-Oct, if I catch that one right
I want the brass ring, a 100g bar next time, and for the last Apr '16 low a 200g bar.
I was buying a little each low because I can see the premium going up and physical
pricing emancipating from the paper, its expensive and takes budgeting so it working
out to pace it in each low. About premium, my first and worst buy, 5 british sovereigns
were purchased a long time ago middle 2012, and their price is down
$45 each or $180 per ounce while the NY price is down $400 in that time. In fact
it's good enough time to fill out 5 more sovereigns now. In the fall low I want a
100g bar and in the early 2016 low I want a 200g bar and that should be all because
I wont want to be chasing price up.
What I am saying it is expensive and takes time to pland and accumulate and I got
alot of silver over the same time too, alot of money diverted from other things it takes
discipline.
GLD is missing the "O" as in: ornate, object, organic, objective, original, observable.
GLD is the true barbarous relic.
Gold...not so much.
What does GLD have to do with gold?
Not much other than keeping the price of physical down as physical tracks GLD.
OK... Maybe it has a lot to do with it.
Buying shares of GLD and thinking that you're in the gold market is like buying a box of Arm & Hammer baking soda and thinking that you're now part of a drug cartel.
The correct spelling of what is discussed here is 'gold' not gold.
There is a certain quality to the physical that a furure promise of physical simply lacks.
In order to invoke the zero counterparty risk clause of gold, it must be owned in physical form and not held by a custodian of any kind.
Only a fool would buy GLD. Its the pooch to screw whenever JP Morgan or HSBC need Phys Paper promises and nothing more plus you are aiding and abetting the manipulation of gold prices to the downside. Its the total package of screw you by the Cartel. A crooks masterstroke.
Sounds like these guys are casting their nets for new suckers.
IMHO its OK to use GLD and GLD Options to trade with the Cartel. When the Commercials have record shorts, that means the price of paper Gold (And so GLD also) is going to fall to the lower end of the range. Whenthe Managed Money crown are record net short and the Commercials are down to their minimum net short position, that means the price is about to go up to the top end of the permitted range. Trading with the cartel in this way using paper is fine and I use the profits, both up and down, to buy more physical metal.
With all the gold moving East for the past few years, I would be willing to venture that 350 of those 700 tonnes are actually IOU's from JPM
Dumb & Dumber -- Empty Suitcase of Money - YouTube
www.youtube.com/watch?v=7GSXbgfKFWg
This writer seems to be confused about the difference between paper and physical gold.
Very few people realize GLD losing tonnes is a good thing. Do people think the miners are buying it back?...outflows mean people are buying physical, not paper.
And because ONLY Authorised Participants (AP's), the same Bullion Banks that are The Cartel, are allowed to withdraw physical Gold from GLD in blocks of 100K Shares, they have used GLD as a source of physical metal to meet demand from China. That reduces the GLD share float so that the price per share will always reflect the spot price of Gold directly AND, at least in theory adjusts physical inventory accordingly. When inventory moves against the price of Gold, as has often been the case recently, it means that the AP's are just using GLD as a source of physical Gold when they can't find it elsewhere.
This guy I know bought GLD before he knew better.
Last few years he's been donating his appreciated GLD to charity and buying the physical.