Seeking Alpha

Gold ETP exodus fastest on record

  • Holdings in the 14 largest gold ETPS have plunged 31% to 1,813 metric tons YTD, according to Bloomberg, the first annual decrease since the funds started trading in 2003. The median guess of a Bloomberg survey of analysts calls for another 311 tons to be withdrawn in 2014.
  • “Why would you want to hold gold and see the value depreciate when you can buy equities and see your money grow," asks wealth manager Jeff Sica, providing a locker-room quote for the gold bulls.
  • Taking the other side is Commerzbank head of commodities research Eugen Weinberg, who says the "weak hands" are already out of the market, and inflows and price stabilization should return in Q2.
  • Gold is higher by 0.8% today to $1,244.50 per ounce.
  • Gold ETFs: GLD, IAU, PHYS, SGOL, UGL, DGP, GLL, DZZ, UGLD, DGL, DGZ, AGOL, GLDI, DGLD, TBAR, UBG
Comments (20)
  • This is very likely a contrarian technical signal that gold is bottoming.
    16 Dec 2013, 01:31 PM Reply Like
  • It's more a sentiment signal that much of the selling is done.
    16 Dec 2013, 01:40 PM Reply Like
  • OK, we could argue over if it's a technical or a sentiment signal
    …can we agree that we are beginning to see a bottom?

     

    You know, if this turns around, we always talk about buying when there is blood in the streets and after all the weak hands have lost their shirts, it's pretty exciting that we are seeing all these truisms being played out in front of us.
    16 Dec 2013, 01:49 PM Reply Like
  • "You know, if this turns around, we always talk about buying when there is blood in the streets and after all the weak hands have lost their shirts, it's pretty exciting that we are seeing all these truisms being played out in front of us."

     

    All that is left is determining whether the security / investment / asset is attractive, i.e. cheap. It's a relatively straight forward process to do that for a stock, a bond, a house, or a farm; how do you propose doing that for gold?
    16 Dec 2013, 04:00 PM Reply Like
  • http://1.usa.gov/sQo6xW
    17 Dec 2013, 05:37 AM Reply Like
  • This proof that analysts are useless. They see gold down 30% this year. So their prediction for next year? Down another 30%. Brilliant!!! Pay those guys a million bucks. Most of the street hates gold but they all have buys on airlines. Ok. There is a safe sector for you. UAL up 60% this year so of course it is a top pick for 2014. What a joke.
    16 Dec 2013, 01:50 PM Reply Like
  • I wonder if "Jeff Sica" was touting equities in January 2009.

     

    I wonder if he was touting equities in March 2000.

     

    I wonder what he had to say about gold in December 2008.
    16 Dec 2013, 02:00 PM Reply Like
  • Regarding Jeff Sica, in a New York Times article dated July 23, 2011 (found here: http://nyti.ms/1bUpRjq), it is quoted as saying:

     

    "Jeffrey Sica, for example, president of SICA Wealth Management in Morristown, N.J., is bullish about gold and other commodities — and bearish about nearly every other asset class."

     

    It appears that Sica's bullishness in gold was at or near the top. Not the best timing overall; maybe that could be the case this time around.
    16 Dec 2013, 02:29 PM Reply Like
  • If physical gold goes lower than $1200/oz, I am buying as much as I can. :)
    16 Dec 2013, 02:13 PM Reply Like
  • Gold is already at or below cost of production for many miners, so I wouldn't wait too long to get started. It could dance around these levels for a little longer, but it cannot be held down at the current price level for long.
    16 Dec 2013, 02:16 PM Reply Like
  • So there's another 1,813.3 metric tons to be sold. Assuming China is the only net buyer nowadays due to the negative sentiment in the West, assuming that scrap supply is met by demand in other countries than China and assuming mining will produce some 2,700 metric tons in 2014, that means that China should buy some 4,500 metric tons to level out the supply.
    In theory that is possible if they sell $180bn worth of their treasuries.
    16 Dec 2013, 03:06 PM Reply Like
  • China State Sate Administration of Foreign Exchange (SAFE) reported today that Chinese companies falsified $2.5 bln of foreign exchange transactions in the first eleven months of the year: 112 companies involved. So trade finance, letters of credit that saw an increase in yuan use, is reflecting a disguised capital outflow out of China as "trade inflows" of gold and other commodities into China, with most of the yuan trade finance via Hong Kong and Singapore and via Chinese companies. So looks like financial capital is leaving China for some reason...
    16 Dec 2013, 03:07 PM Reply Like
  • A lack of faith in "paper"?
    16 Dec 2013, 03:45 PM Reply Like
  • I have owned and held physical gold and silver for ~3 years, bought for all the right reasons, Obama is messing up the country and our financial system, the dollar is a joke, metals are "safer" when inflation takes off soon (36 mos ago) social unrest, etc etc and have been beaten more than a rented mule, but if I had never owned an ounce and you asked me today, I would say BUY for every reason I listed above, there's an old saying....you can be 100% correct and be broke before the market does what you expected. Or a reasonable facsimile of that. If you have $$$ you won't need for any reason going forward than buy and hold, if you will need the $$$ in 1-2 years don't
    16 Dec 2013, 03:39 PM Reply Like
  • Ive been stuck in this meat grinder since Nov 2011. Im down 40-50% in my miners, but we are so much closer to the end than the beginning of this bear, so Ive waited 25 months..whats a few more months now. In this to win this.
    16 Dec 2013, 03:56 PM Reply Like
  • Will be a great buy at $1,000. Think it will be there by first quarter of 2014.
    16 Dec 2013, 04:38 PM Reply Like
  • 1813 metric tons, or tonnes, is about 1% of all the mined gold in the world. ONE PERCENT! Talk about the tail wagging the dog!
    16 Dec 2013, 06:32 PM Reply Like
  • What is an ETP?
    16 Dec 2013, 10:31 PM Reply Like
  • Exchange Traded Product. This includes things where there is unsecured creditor risk to the issuer like a bond that pays based on index performance.
    16 Dec 2013, 11:42 PM Reply Like
  • Well I have no clue to the storm the FOMC will stir up tomorrow, but some of them are certifiable. We sure can't draw any reliable conclusions from the price action yet. Just as the Greeks used to say, you fight an enemy too long and you are him. Hmmmm, we sure are fighting our own people to set things straight and they won't do it. Just like jamming a radio station, our NGM's keep us from trading and letting the market settle itself. Too much pabulum (QE'ing) and taper worry and fooling with interest rates and so on. When we let the market solve its own problems and let the veggie buyers on Market Street set the prices by supply and demand as it should be. I still repeat, you can't spend your way to prosperity.I don't see how the NGM's can stop buying bonds. That is how interest rates are manipulated. if they stop manipulating and let the market take its course, their US T-bond overbought situation will correct and the stocks will react in a negative manner. Just how negative I have no clue but it will probably be more than just a lil 'correction'.
    I'm just a smelly ole captain beached and sun dried in the Florida sun, so what to I know. Other than needing another green label. I don't suspect the NGM's will ever stop buying and I ain't no banker but I can tell you this, it can't end nice. And the longer they choose not to pay the Piper, the nastier the end MUST be. I STILL say, at these levels, {he@@, at any level} buy the PM's.I look at all the fundamentals, the dollar level, (which explains why gold is where it is in US $'s). In any other currency, Au is still at the top. Gold is simply waiting for the US$ to be at a realistic level compared to its money supply out there. Boy, if and when that ratio ever corrects to reality, the Au to Ag ratio will be a forgotten graphic. You see, pilgrim, the reality is, our dollar is dropping in value just as all the other currencies of the world. It's just that our currency, like our shoreline, is more attractive still than any other. And until we and our money get less attractive and others begin to take our place, gold will kind of languish in a slow gentle rise, and that is just precisely what I want. For gold to be an inflation hedge and that is why I am in numismatics for the time being.
    Capt. Brian
    The Lost Navigator
    You still don't get it do ya? lemme spell it out:N U M I S M A T I C S. GET SOME MS70's AND SOME PF70's. The older the better. See you at the F.U.N. Show in Orlando.Table #538.... January 9-12/2014
    17 Dec 2013, 11:37 PM Reply Like
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