• 50 mins Aluminum Is Bouncing Back In China
  • 3 hours The Deep-Sea Mining Debate
  • 19 hours Markets Trending Down Despite Tech Blow-Out
  • 1 day Big Oil Battered On Dismal Earnings
  • 2 days Russian Billionaire Bails On Mid-Sized Gold Miner
  • 2 days Gold Stocks Gear Up For A Big Autumn
  • 3 days America Is Looking To Bring Nuclear Power To Space
  • 3 days What Is Behind Gold's Astonishing Rally?
  • 4 days Stocks Tumble On Brutal Economic Report
  • 4 days Kodak Soars By 400% After Trump Bump
  • 5 days U.S. Coal Production Falls To 42 Year Lows
  • 5 days Indonesia Moves To Bolster Mining Sector
  • 6 days The U.S. Dollar Is Losing Ground As A Reserve Currency
  • 6 days Gold Prices Soar To Record Highs As Dollar Dips
  • 7 days Republicans Unveil Stimulus 2.0
  • 7 days Big Oil Is Back On The M&A Game
  • 8 days Big Banks Want Masks And Lockdown In Second COVID Wave
  • 10 days The Unintended Consequences Of A COVID Stimulus
  • 11 days Tesla Looks To Incentivize Nickel Miners With Massive Contract
  • 11 days Congress Butting Heads Over New Round Of Stimulus Checks
Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

  1. Home
  2. Markets
  3. Other

Good News: Investors Cut Gold Holdings to Six-Year Low; Good Timin'

Investors in general do not give a rat's ass about gold.

Here's proof: Gold Out of Favor as Investors Cut Holdings to Six-Year Low.

Investors cut holdings in bullion-backed exchange-traded products to the lowest since 2009 as surging stock markets from the U.S. to China hurt demand and prospects for rising U.S. interest rates boosted the dollar.

The assets contracted 5.45 metric tons, or 0.3 percent, to 1,594.08 tons as of Tuesday, according to data compiled by Bloomberg. The holdings slumped 39 percent since reaching a record 2,632.52 tons in December 2012, shrinking by 33 percent in 2013 and a further 9.3 percent last year.

World equities surged in 2015 as U.S. stocks reached a record and the main stock gauge in China more than doubled in 12 months. The Federal Reserve has signaled it expects U.S. growth to pick up after a contraction in the first quarter and, while unlikely to raise interest rates this month, it's left the door open to tightening later this year. Higher rates curb gold's allure because it usually gives returns only by price gains

"You're seeing some significant, excess returns from U.S. stock markets and China's stock market as well," Victor Thianpiriya, an analyst at Australia & New Zealand Banking Group Ltd. in Singapore, said before the data was released. "That's not positive for gold demand."


Gold Weekly Chart

Weekly Gold Chart


Good Timin'

As I have commented before, sentiment is not a timing indicator. Bad sentiment can always get worse.

The good news is gold has been holding a steady bottom for nearly two years as investors dump it chasing insanely priced equities and junk bonds.

The precious metals slump will reverse. I just cannot say when.

What you do not want to see is bullish sentiment in the face of declining prices, something I eventually expect to see with equities and junk bonds. We were there in 2000, 2007, and it's going to happen again.


Investment Philosophy

Buy assets when no one loves, sell then when everyone loves them.

Buy gold and silver now, and sit on it. Both are very much out of favor.

 

Back to homepage

Leave a comment

Leave a comment