Thursday, April 28, 2011

Despite Gold Moving Up, ETF Holdings Shrink In First Quarter Of This Year

ETF holdings of gold have been a major driver in the earlier stages of this bull market, but not in the latest stage. Despite gold going up this quarter, ETF holdings have dropped by about 57 tonnes or about 2.62%.
Gold ETFs monitored by the WGC held 2167.4 tonnes on December 31 2010. This amount fell to 2110.3 tonnes by the end of the quarter.

Earlier this month Philip Klapwijk, chairman of leading precious metals consultant GFMS, suggested that cost savings may account for some of the moves out of ETFs and into physical gold ownership

"Some of this apparent slack in ETFs... is believed to have been taken up by allocated gold accounts, which can incur costs of as little as 0.1% per year," he said. "ETFs typically charge around 0.4% per year in fees for investment management, as well as charging brokerage fees for every transaction made."
This reason gibles with other statistics showing holdings of physical gold rising.

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