Gold Investment Sales Total $6 Billion as ‘Flood Continues’Claudia Carpenter and Nicholas Larkin
Gold sales through exchange-traded products came to $6 billion last month as investors put more money into stocks and bonds, ETFGI Ltd. said.
The outflow for gold in May pushed the total for the first five months this year to $24.2 billion, compared with gains of $3.2 billion for the same period last year, according to data provided by e-mail today from London-based ETFGI. Commodity outflows were $6.7 billion last month compared with $25 billion added to stock ETPs and $3.1 billion to fixed income.
Gold outflows came on top of an $8.8 billion cut in April when the metal slid to a two-year low and entered a bear market. BlackRock Inc. said the April gold sales were a record. Investors cut gold-backed ETP assets that reached an all-time high in December as faith in the metal as a store of value waned after inflation failed to accelerate and confidence mounted that the U.S. economy was improving.
“The flood continues,” said Robin Bhar, an analyst at Societe Generale SA in London. “If the price does weaken as we think, it’s going to prompt more ETP liquidation.”
Gold prices that rallied for 12 years in the best run in at least nine decades are down 16 percent this year while U.S. equities climbed to a record.
The S&P GSCI gauge of 24 commodities dropped 2.9 percent this year and the MSCI All-Country World Index of equities gained 6.7 percent. Treasuries are down 1.2 percent, a Bank of America Corp. index shows.
Commodity ETP outflows last month were down from $9.4 billion in April, according to ETFGI, which is managed by Deborah Fuhr, formerly of BlackRock. All ETP assets climbed to a record $2.14 trillion last month, ETFGI said.