GLD Has Lost Assets Every Month In 2013

December 02, 2013

The outflows from the biggest gold ETF show no signs of stopping.

The SPDR Gold Trust (GLD | A-100) had another difficult month in November, facing net asset outflows of $1.5 billion, while its share price slid another 5.5 percent.

So far this year, investors have yanked assets from GLD—the market's largest physical gold trust—every single month. The fund has now lost more than $23.29 billion in assets under management year-to-date, making it the single least popular ETF of 2013.

To put that asset loss in perspective, consider that GLD started the year as the second largest ETF with $72.24 billion in the market behind only the $163 billion SPDR S&P 500 (SPY | A-95), but now ranks eighth with just under $34 billion in total assets.

In a broader sense, gold ETF holdings have gone from a record high of 84.6 million troy ounces at the start of the year, to under 60 million at last count. That's the largest decline ever, according to Hard Asset Investor's data.

There's no question that gold is out of vogue these days. After coming within grasp of $2,000 an ounce following more than 10 years of rallying, gold prices dropped more than 25 percent in the past 11 months. That is gold's worst decline since the early 1980s.

GLD itself is down more than 27 percent year-to-date.

Chart courtesy of

Behind the weakness is investor's rising appetite for risk—or equities—in an environment of easy money policies, and extremely low interest rates

The U.S. Federal Reserve's renewed commitment this fall to continue to pump money into the economy has put major pressure on the price of gold. Lack of inflation has also weighed on the price of the yellow metal.

Even if tapering of the Federal Reserve's quantitative easing begins to take shape next year, that too will be negative for gold as investor focus shifts toward raising short-term rates, HAI's commodity analyst Sumit Roy recently pointed out.

"Gold is not so much a generic safe haven, but a hedge against a specific risk: inflation," Roy said. "It will react more strongly to monetary policy and expectations of inflation."


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