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Investors Pull $14 Billion from Gold ETF as Bull Market in Doubt


Investors have redeemed $14 billion from the world’s largest gold ETF so far this year on fears the 12-year bull market in gold has ended.

SPDR Gold Shares (GLD) is down about 15% for the trailing six months.

The ETF currently holds about 1,066 metric tons of gold valued at $50.3 billion, down significantly from the start of the year.

Year to date, GLD has experienced net outflows of roughly $14 billion, according to IndexUniverse data.

Gold prices have fallen more than 20% since October 2012 into a bear market.

ETFs tracking the precious metal have suffered losses and outflows while the U.S. stock market as measured by the S&P 500 has climbed to new all-time highs. Gold prices are falling as central bank stimulus measures haven’t stoked runaway inflation and as the metal loses some of its safe-haven allure.

Despite the weakness in gold futures and ETFs, demand for physical gold has been surprisingly robust, CNNMoney reports.

“It’s reasonable to say that the currency debasement and easing measures will support gold,” said Alan Gayle, a senior strategist at RidgeWorth Capital Management, in a Bloomberg article. “The bulls still have to prove a lot. There is lot of skepticism surrounding gold. We have to watch to see if prices have found a near-term bottom.”

Full disclosure: Tom Lydon’s clients own GLD.