| What Does Money Managers’ Positioning Tell You about Gold Prices? | |
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The Gold Price Outlook: What Investors Need to Know (Continued from Prior Part) Precious metals ETF holdings
ETFs form a significant portion of overall gold investment demand. Outflows from ETFs led to a ~28% fall in gold prices in 2013. That’s the equivalent of selling 881 tons of gold. For this reason, investors should track any sustained or significant buying or selling activities by these ETFs.
Gold ETF holdings at a multi-year low
As of November 25, known gold holdings equaled 1,493.5 tons. This is the lowest level since February 2009. They’ve declined by 11% since the peak holdings in February 2015, and 3.2% of that decline came in within the last month. According to a World Gold Council (or WGC) 3Q15 report, gold ETF holdings have fallen 4% sequentially in 3Q15. Holdings in the SPDR Gold Shares ETF (GLD) fell 3%, while the iShares Gold trust fell 4%. GLD is the world’s largest ETF, and it accounts for ~40% of the total ETFs traded. Silver-based ETFs such as the iShares Silver Trust (SLV) have also seen significant falls in their prices.
Money managers cut long positions
According to the latest Commitment of Traders (or COT) report, the non-commercials—money managers—cut their net long positions in gold for the fourth straight week through November 17. The expectation regarding a Fed rate hike is leading hedge funds to increase their bearish bets on the metal. This is in line with increasing long positions in the US dollar. The USD has been near the most net long it has been since April 2015.
Please read Position of Gold Futures: Is a Gold Price Rebound Near? to learn more about the COT report.
Implications for investors
Because ETFs are large holders of physical gold and silver, and since the market tends to follow money managers, the recent bearish sentiment might be a further short-term negative for gold prices. As a result, it might negatively affect precious metal prices and stocks like Sibanye Gold (SBGL), B2Gold (BTG), Hecla Mining (HL), and Silver Wheaton (SLW). It’s also negative for the Market Vectors Gold Miners ETF (GDX). Silver Wheaton accounts for 4.80% of GDX’s holdings.
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VanEck Vectors Global Alternative Energy ETF
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PRODUCTEUR |
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CODE : SLW.TO |
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ISIN : CA8283361076 |
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CUSIP : 828336107 |
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Silver Wheaton est une société basée au Canada. Silver Wheaton est productrice d'argent, de cuivre, d'or, de plomb, de silica et de zinc au Canada, au Mexique, au Perou, au Portugal, en Grece et en Suede, en développement de projets d'argent, de cuivre, d'or et de zinc au Canada et au Chili, et détient divers projets d'exploration au Portugal et en Argentine. Ses principaux projets en production sont ZINKGRUVAN en Suede, KENO HILL (BELLEKENO) et MINTO MINE au Canada, SAN MARTIN - LUISMIN, PEÑASQUITO, LUISMIN et G-9 CAMPO MORADO au Mexique, YAULIYACU au Perou, STRATONI en Grece et NEVES-CORVO au Portugal, ses principaux projets en développement sont PASCUA LAMA au Chili et KUTCHO CREEK au Canada et ses principaux projets en exploration sont PROMOTORIO DURANGO et MONTOROS au Mexique, ALJUSTREL au Portugal et LOMA DE LA PLATA (NAVIDAD) en Argentine. Silver Wheaton est cotée au Canada, aux Etats-Unis D'Amerique et en Allemagne. Sa capitalisation boursière aujourd'hui est 1,4 milliards (992,0 millions US$, 902,8 millions €). La valeur de son action a atteint son plus bas niveau récent le 09 mars 2007 à 10,01 , et son plus haut niveau récent le 15 mai 2017 à 28,53 . Silver Wheaton possède 47 442 200 actions en circulation. |