Why you should cheer the sell-off of gold ETFs.
By Alena Mikhan and Jeff Clark, Casey Metals Team
Since January 1, the holdings of gold-backed exchange-traded funds (ETFs) have dropped by nearly four million ounces (125 tonnes). February turned out to be the worst month for the world's largest ETF, the SPDR Gold Trust (GLD), which saw its holdings drop to 39.7 million ounces (1,236.73 tonnes), its lowest level since October 2011.
If this were the only data investors looked at, they might conclude that "everyone is selling" and maybe even that the bull market is over. But these data are misleading.
That's because while ETF holdings are declining, the physical market is seeing robust support. In fact, the US Mint – the bellwether for measuring demand of physical gold in the Western world – reports that sales of gold and silver coins are soaring. ...