such as the SPDR Gold Trust (NYSEArca:GLD) and the iShares Gold
Trust (NYSEArca:IAU) bled a lot of value again on Wednesday as gold
prices fell to six-month lows, and although they saw a little
reprieve in overnight trade, they remain wounded and very much in a
The $67.5 billion GLD and the $8.7 billion IAU each shed about
2.6 percent Wednesday, extending losses that now have cost each of
the funds roughly 6.5 percent of value in the past five days alone.
What's more, GLD's price action Wednesday came accompanied by net
outflows of $1.06 billion-the largest one-day outflow in 18
months-while IAU lost some $85 million in the same day. In the
past one-week period, investors have pulled out $1.42 billion out
of GLD and $231 million out of IAU, according to data compiled by
But the bleeding wasn't confined to physically backed funds. In
fact, gold miner ETFs-those that invest in the equities of
companies mining and producing gold-were sliding twice as fast.
The Market Vectors Gold Miners ETF (NYSEArca:GDX) dropped some
5.1 percent Wednesday, extending losses that are now amounting to
11 percent in the past five days. Its smaller-cap counterpart, the
Market Vectors Junior Gold Miners ETF (NYSEArca:GDXJ), has lost
more than 14 percent in the same period.
Comex gold prices, now trading below what many see as a key
technical level of $1,600 an ounce-the lowest readings since last
summer-continued to face selling pressure as the U.S. dollar gained
Behind the downward momentum in the yellow metal is no
particular piece of news, but rather a consolidation of a stellar
2012 performance at a time when not only were investors racing for
a safe haven, but central banks were buying gold at the fastest
rates in some 50 years, HardAssetsInvestor.com analyst Sumit Roy
More recently, a changing attitude among investors-who are now
expanding their exposure to riskier assets as they express a sort
of "worst-is-over" sentiment about the global economy-has also
pressured gold values, Nicholas Brooks, head of research and
strategy for ETF Securities, said in a note issued today.
Indeed, last week alone, U.S. equities ETFs attracted net
inflows of more than $870 million, with international equities
gathering twice that amount, according to data compiled by
Still, no one is calling for the end of a decade-plus-long rally
in gold prices because, if nothing else, current lows are already
enticing bargain-hunting buying, albeit a test of the
$1,500-an-ounce level is not out of the cards, Roy said.
"While the technical picture has fueled the liquidation of gold
holdings, macro fundamentals suggest a potentially attractive entry
level, as global financial markets remain awash with liquidity,
global interest rates expected to remain extremely low for the
foreseeable future and key macro risks lingering, particularly for
the eurozone economy," Brooks added in his note.
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