• 11 hours Are Cryptocurrencies Funding Terrorism?
  • 19 hours Promising Oil Companies To Watch In 2020
  • 1 day Could China's Coronavirus Outbreak Impact U.S. Stocks?
  • 2 days Tesla Stock Continues To Soar
  • 3 days What New Economic Data Reveals About Gold's Trajectory
  • 3 days The Lucrative New Tech Hijacking Your Privacy
  • 4 days The Biggest Loser In The China-U.S. Tariff Tit-For-Tat
  • 4 days Trade War Takes Its Toll On Shipping
  • 7 days Is $90 Oil Possible? An Interview With Jay Park
  • 7 days Billions Of Dollars Are Flooding Into The Flying Taxi Space
  • 8 days Is This The Most Important Energy Project Of 2020?
  • 8 days Startups Are Dying To Give You A Better Death
  • 9 days U.S. Restaurants Are Struggling With Rising Labor Costs
  • 9 days The Banking Bonanza Is Just Getting Started
  • 10 days How The Trade War Ceasefire Will Impact The Energy Industry
  • 10 days Who Is The Most Dangerous Person On The Internet?
  • 11 days SoftBank Sees First Quarterly Loss In 14 Years
  • 13 days Prepare For An Oil Glut In 2020
  • 14 days Why A Strong Yuan Is A Promising Sign For The Trade War
  • 14 days What Would You Sacrifice For A Debt-Free Life?
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Texas Hedge Report

Texas Hedge Report

Texas Hedge Report

Todd Stein & Steven McIntyre are internationally known analysts and editors of The Texas Hedge Report, a market newsletter that highlights under and overvalued securities…

Contact Author

  1. Home
  2. Markets
  3. Other

Bull Run - Gold and Silver Accumulation Ramps Up

Gold started the year at $515 per ounce. Gold peaked at $725/oz on May 12th. The gold ETF (GLD) started the year with 8.5 million ounces in its vaults. On the day of gold's peak, GLD had 11.4 million ounces. Gold has since tumbled $145/oz in 6 weeks, but curiously the assets of GLD have been rising as of late. In fact, GLD yesterday reached a new record high of ounces in the trust with over 11.7 million ounces.

The same trend of "a declining metal price, but increased ETF assets" can be seen in the silver ETF (SLV). Silver started the year at $8.85/oz. It subsequently rose 70% to $15/oz, before correcting by $5.50 to near $9.50 an ounce. The silver ETF began life on April 28th with silver at $12.55/oz. The silver ETF reached a peak of 73 million ounces in its vaults around the time physical prices peaked. With the aforementioned sell-off, silver ETF assets declined to 67 million ounces, but have since begun heading back upwards to a near peak level of 72-73 million ounces in the trust.

The continued accumulation of gold and silver ounces in the ETFs likely means that savvy individual and institutional investors (who are driven by fundamentals) are eagerly accumulating the metals after their sharp pull back - a bullish sign. At the same time, the price has been weak in all likelihood because leveraged black-box technical types at CTAs and hedge funds are liquidating. One could argue that gold and silver prices declining in spite of the ETFs building up ounces is a bearish sign; we, however, believe that ETF asset accumulation is evidence that long-term fundamental investors are flocking back to the metals in anticipation of a continuation of their multi-year bull market resuming. When the black-box precious metal selling by funds is over, we should again see gold and silver moving higher as the U.S. Dollar is shunned by global investors who realize the Fed has exhausted its ability to raise rates given that the residential real estate market in the U.S. is rolling over. Our June 2006 issue goes into detail about the housing market falling apart, so be sure to subscribe for more insight.

 

Back to homepage

Leave a comment

Leave a comment