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Gold ETFs Fall as Soros Scales Back GLD Investment


SPDR Gold Shares (GLD) was off more than 1% in Friday’s premarket and set for its third straight down day following reports that billionaire investor George Soros pared his stake in the $70 billion precious metal ETF last quarter.

Soros Fund Management LLC cut its investment in GLD by 55% to 600,000 shares in the fourth quarter, Bloomberg reports.

“The reduction in holdings by George Soros may unnerve the market a little bit,” said Nick Trevethan, a senior commodities strategist at Australia & New Zealand Banking Group, in the article.

Soros in 2010 famously called gold the ultimate asset bubble due to in part to low interest rates and easy monetary policies from global central banks after the financial crisis. [Soros Again Trims Gold ETF Holdings]

GLD is the largest bullion-backed ETF. The fund is down about 5% the past three months. Other ETFs that hold the metal include iShares Gold Trust (IAU) and ETFS Physical Swiss Gold Shares (SGOL).

The amount of bullion held by gold ETFs listed around the world increased 274.9 metric tons over 2012, reaching a record 2,632.5 tons on Dec. 20. [China Readying Bullion-Backed Gold ETFs]

Soros and some other prominent hedge funds cutting their gold ETF positions in the fourth quarter “may bolster speculation that gold’s 12-year bull-run is coming to an end as economic data from the U.S. to China show signs of recovery, curbing haven demand,” according to the report.

“Gold traders are the most bearish in more than a year on mounting speculation that improving economic growth from the U.S. to China will curb demand for this year’s worst-performing precious metal,” Bloomberg reported in a separate article.

Silver ETFs were also set for a lower open Friday. The iShares Silver Trust (SLV) slipped 1.5% before the bell.

SPDR Gold Shares


Full disclosure: Tom Lydon’s clients own GLD and SLV.

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.