• 175 days Will The ECB Continue To Hike Rates?
  • 175 days Forbes: Aramco Remains Largest Company In The Middle East
  • 177 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 577 days Could Crypto Overtake Traditional Investment?
  • 582 days Americans Still Quitting Jobs At Record Pace
  • 584 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 587 days Is The Dollar Too Strong?
  • 587 days Big Tech Disappoints Investors on Earnings Calls
  • 588 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 590 days China Is Quietly Trying To Distance Itself From Russia
  • 590 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 594 days Crypto Investors Won Big In 2021
  • 594 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 595 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 597 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 598 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 601 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 602 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 602 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 604 days Are NFTs About To Take Over Gaming?
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