SPDR Gold Trust (ETF) (NYSEARCA:GLD) Has Gold Bottomed Out?


Dallas, Texas 01/31/2014 (FINANCIALSTRENDS) – SPDR Gold Trust (ETF) (NYSEARCA:GLD) has had a very difficult 2013, gold prices tanked and gold backed ETF saw investors pull out money. Gold demand was subdued though investors expected the low prices to spur demand.

The Gold Question:

Gold is considered a very safe investment and is still preferred in times of crises. There were many small and big crises in 2013 but instead to spurring the demand for gold, it had little or no effect. One of the big reasons was India. Spurred by rising purchases of gold and gold hoarding, the government tightened norms for gold import. The trade deficit was being adversely affected. Though the price fall had nothing to do with this move, it seems gold demand was hit. We are yet to see figures to prove or disprove. Anyhow, low prices of gold did not spur demand and gold ETF like SPDR Gold Trust (ETF) (NYSEARCA:GLD) took a big hit.

These ETFs saw record outflows in 2013, $19.6 billion in the second quarter and $4.2 billion in the next. The peak was reached in April as outflows touched $8.7 billion.

Performance Of SPDR Gold Trust:

Among its peers, SPDR Gold Trust (ETF) (NYSEARCA:GLD) turned in a much worse performance. Investors pulled out $25.1 billion in 2013. The second quarter saw redemptions of $11.6 billion followed by $2.6 billion in the third and $4.3 billion in the last quarter. However, there could be a bit of good news here. With gold ETFs losing their luster among big institutional investors, they do not have a major impact on prices of gold. It is expected that gold prices will continue to improve in 2014. With large institutional players out of the market, small investors will continue to benefit as prices are bound to improve looking at the growing demand for the yellow metal from the middle class.

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