The SPDR Gold Shares (GLD) is a week away from its ninth anniversary, one that will be marked by SPDR Gold Shares and the World Gold Council ringing the closing bell at the New York Stock Exchange Tuesday.
GLD, the oldest and largest ETF backed by physical holdings of gold, celebrates this anniversary at a time when gold, barring a miracle, will finish with its first annual loss in the past 13 years. The ETF is by far the worst in terms of year-to-date outflows, having hemorrhaged $22.2 billion in assets. To be fair, the iShares Gold Trust (IAU) is also on the list of 10 worst ETFs in terms of 2013 outflows. [Gold ETFs Can't Wait for October to End]
There are glimmers of hope for GLD, IAU and other ETFs backed by physical bullion. After investors continued pulling cash from gold ETFs last month despite decent performances, gold funds saw incremental inflows last week. [Gold ETFs Finally See Inflows]
However, demand for physical gold in the U.S. is tepid.
“The number of one-ounce gold coins (the primary bullion product offering) hit 35,333 on a rolling 6-month basis in October, which was the least since July 2008. The 12-month rolling average wasn’t so dismal; by that measure 70,708 one-ounce coins were sold in October, which was the least since this past March. For the sake of comparison, peak sales during the Great Recession were 130,083 (April 2009) and 114,125 (November 2009) for the respective 6-month and 12-month rolling averages. Currently, gold sales are down 73% and 38%, respectively, from those peaks,” according to ConvergEx Group Chief Market Strategist Nick Colas.
On the other hand, Colas notes there is some supportive anecdotal evidence that could hearten gold bulls, evidence acquired in conversations with dealers in New York’s famed Diamond District.