Thursday, March 17, 2011

SPDR Gold Shares (NYSEArca:GLD) Divests of 70 Tons of Gold

A lot has been made of the selloff of 80 tons of gold by gold ETFs in January and February, but of the 80 tons sold, 70 tons of that was sold by SPDR Gold Shares (NYSEArca:GLD), narrowing the event to them alone.

Most of the change in SPDR came about from portofolios being balanced, and expectations are investment will continue to grow in the longer term.

80 tons of gold were sold out of gold ETFs in the first two months of 2011 but, there is no need to worry yet that investors in these products are beginning to get cold feet about the yellow metal.

Speaking on Mineweb.com's Gold Weekly podcast, Jason Toussaint, MD for the US and Investment at the World Gold Council said that of the 80 tons sold in January and February, 67 of those tons were sold in January and 70 were sold specifically out of the SPDR gold trust.

"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.

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 favor of holding bullion directly in their own names.

SPDR Gold Shares closed Wednesday at $136.24, dropping $0.03, or 0.02 percent.




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