ETP Investors Reducing Gold Holdings Despite Lack Of Tapering

Gold holdings in Exchange Traded Products has seen continued reductions over the past four weeks, according to data compiled by Bloomberg. This reduction has occurred despite the recent US Federal Open Market Committee decision to delay tapering of its asset program. It highlights the continued headwind for gold where central bank and physical buying has been supportive but without a change of heart from the institutional investor, of which many prefer to use ETP, further upside will be difficult to achieve.

Since gold reached a low point on June 28 at 1,180.50 USD/oz, it has subsequently rallied by 13 percent to where we are today. During this time, holdings in ETP have been reduced by 118.4 metric tons, a far cry from the dramatic reductions witnessed especially during the second quarter but it highlights how the investment sentiment towards gold remains fragile. This despite the recent fall in government bond yields and the near-term prospect of the US government shutting down due to its failure to reach agreement on the budget.

Silver holdings remain near a record despite silvers underperformance throughout September.