• 9 hours Gold Is Beating Buffett’s Berkshire Hathaway
  • 12 hours What’s Behind The Silver Sell-Off?
  • 15 hours The Retail Apocalypse Is Accelerating
  • 18 hours The Top Tech Stocks Of The Year
  • 1 day America’s Workforce Elderly Workforce To Double By 2028
  • 2 days Toyota Tests Solar-Powered Prius
  • 2 days Why The Gold Rally Flatlined
  • 3 days The Uranium Sector Can’t Catch A Break
  • 3 days Upcoming Fed Meeting Has Investors On Edge
  • 4 days Global Gold Sector Outlines Responsible Mining Principles
  • 4 days China’s Giant Vampire Fund Loses $120B
  • 5 days McDonalds To Roll Out Robot Drive-Thru Clerks
  • 5 days Savvy Investors Are Betting Big On This Little Data Company
  • 5 days How The Government Is Wasting Tax Money This Year
  • 6 days Supply Concerns Halt Expansion On Tianqi Lithium Plant
  • 6 days The World’s Biggest IPO Is Almost Here
  • 6 days The Relatively Of Money And Happiness
  • 7 days Wall Street Unfazed By Recession Fears
  • 7 days SoftBank Urges WeWork To Pause IPO Plans
  • 7 days Anti-Aging Market To Hit $55 Billion
Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

  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