Investors are dumping gold-backed
exchange-traded products at the fastest pace since the securities were
created a decade ago, mirroring the steepest price drop in 32 years.
Holdings in
the 14 biggest ETPs plunged 31 percent to 1,813.7 metric tons since the
start of January, the first annual decrease since the funds started
trading in 2003, data compiled by Bloomberg show. The removals erased
$69.5 billion in the value of the assets as prices fell by the most
since 1981. A further 311 tons will be withdrawn next year, according to
the median of 11 analyst estimates compiled by Bloomberg.
ETP
investments reached a record $148 billion last year, helping sustain
the bull market that drove a more than sixfold increase in prices since
2001 by offering a way to own bullion without needing to store it. The
slump shows some investors losing faith in gold as a preserver of wealth
after inflation failed to accelerate and the Federal Reserve signaled
it may curb stimulus. John Paulson, the biggest investor in the largest ETP, said last month he doesn't plan to buy more. (more)
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