Is it a loss of confidence in gold thatÂ has caused aÂ 10%Â sell-off over the previous 5 trading sessions? Have under-performing hedge fund managers been forced to liquidate the SPDR Gold Trust (GLD) — hedge fund managers like John Paulson who ownÂ super-sized stakes in theÂ world’s largest gold ETF?
Data may suggest otherwise.
Futures traders have yet to close out positionsÂ “en masse.”Â Moreover,Â physical gold holdings have hardly budged. And retail investors are holding firm to the notion that gold belongs in a portfolio, especially with the weak monetary policies of developed nations. Nevertheless,Â the selling activity in precious metals is turning heads.
So what may be one of the big reasons for the correction in the yellow metal over the last 5 days? One possibility is that itÂ isÂ a form of window dressing. Specifically,Â money managers don’t always need to acquireÂ positions to demonstrate thatÂ they are holding winners;Â they also need to demonstrate profitability in round-trip trades. And since the vast majority of round-trips may be losers right now,Â selling some of theÂ “safer haven” success stories may be the only way to do it. (Note: Careful scrutiny of U.S. treasuries shows that the same profit-taking activity has pushed theÂ 10-year treasury yield from 1.8%Â back up to 2.05%.)
In “Dash For Cash”, Gold ETF Investors Hold On â€“ Frank Tang, Reuters
ETF Investing Doesn’t Have To Be Hard, Or ‘Granular’â€“ Chuck Jaffe, Richmond Times
How Have The Top ETFs Of 2010 Performed So Far This Year? â€“ Matt Krantz, USA Today
Uranium ETF: Inflows Continue Post-Japan Nuclear Crisis â€“ Murray Coleman, Barronâ€™s
RMB Vs DSUM: Comparing The New Dim Sum Bond ETFs â€“ Ron Rowland, Invest With An Edge Â
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