"We need to remember that gold had a tremendous return in 2010. It was up 29% and what we were told directly from investors and their trading partners was that many investors took the opportunity to rebalance their portfolios because gold, whilst it may have been a fairly moderate position initially, because of its return relative to other assets, had suddenly become an outsized position," he said.That last reason was interpreted by the World Gold Council as evidence of a broadening and deepening of gold demand. As for individuals, more of them were asking their financial advisors about gold.
The other primary reason for the sale, according to Toussaint was a decision by some of the larger institutional investors (which account for roughly 47% of the SPDR holdings) to redeem their GLD shares in favour of holding bullion directly in their own names.
Essentially, that's mystery solved. As a result, if this trend continues, the ETF holdings figures will be a little misleading with respect to gold demand.