(Kitco News) - Investment inflows back into gold-backed exchange traded products is a good sign and could be an indication that the market is starting to stabilize, said commodity analysts.
The inflows were driven by SPDR Gold Shares (NYSE: GLD). According to data compiled by the ETF, the trust holds 797.05 metric tons of gold, as of Jan. 17. The previous three days, the ETF reported 789.56 tons of gold. The trust started the week with gold reserves of 793.12 tons.
“The last time holdings increased by that much was in November 2012 when gold prices were trading over USD1,700/oz. This is an encouraging sign for the bullion markets as liquidations from the ETFs were attributed to gold’s decline in 2013,” said analysts from HSBC. “A recent string of gold-exchange trade fund (ETF) liquidation may be showing signs of stabilization as and a rebuild of gold holdings in ETFs would be price supportive, in our view.”
Analysts from Barclays Capital said that physically backed gold ETPs in total rose by 7.4 tons on Friday. The analysts added this was the first time money has flowed back into ETPs in almost a month and the largest daily inflow since Jan 31, 2013.
“However, flows for the month to date are still negative at 16 (metric) tons, but signs of stabilisation will be key in allowing gold prices to find better support,” they said.
By Neils Christensen of Kitco News; email@example.com