Gold held through exchange-traded products, or ETPs, tumbled by the most in more than two years amid speculation that improving prospects for the global economic recovery are undermining demand and hurting prices. Assets in gold-backed ETPs fell 31 metric tons yesterday to 2,043.09 tons, the lowest level since Aug. 10, according to data compiled by Bloomberg from 10 providers. That’s the biggest drop in percentage terms since October 2008, the data show. Holdings have shrunk 3.4 percent from the record 2,114.6 tons on Dec. 20.
Global economic growth may be 4.4 percent this year, the International Monetary Fund said yesterday, boosting its outlook from 4.2 percent. More than half the respondents in a quarterly poll of 1,000 Bloomberg subscribers said that the gold market is a bubble, according to the survey taken Jan. 20-24. Spot gold has lost 6.5 percent since setting a record last month.
“Strong economic data has improved confidence about the global outlook and reduced the need to hold gold and silver as a safe haven against credit risk, event risk and currency weakness,” Standard Chartered Plc said in a weekly report dated Jan. 25. “We expect further weakness in both markets.” (more)
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