Salient to Investors:

  • Gold prices and gold ETP holdings have the most-negative correlation since 2004, making the latter less useful as market predictors..  Mark Luschini at Janney Montgomery Scott said the disconnect is because a lot of money has left.
  • Comex open interest fell to a 5-yr low this month and volatility is near a 4-yr low. The CBOE Gold ETF Volatility Index is down 41% in 2014, touching a 15-month low in June.
  • Goldman Sachs said gold will drop to $1,050 in 12 months.
  • Tom Kendall at Credit Suisse said 2014 ETF flows have been much lower than in 2013 as investors focus more on equities, and the perception of systemic financial risk has fallen considerably.
  • Dan Denbow at USAA Precious Metals & Minerals Fund said steady buying of ETFs will translate into supporting prices in the long-term.
  • John Paulson’s SPDR stake has been  unchanged for 4 straight quarters, but still down 68% since 2009. George Soros and Daniel Loeb sold their entire positions in Q2 2013. Barclays forecast a drop of 100 tons from the gold funds in 2014.
  • Sameer Samana at Wells Fargo Advisors said changes in ETF holdings are no longer a factor influencing gold prices. and geopolitical worries are not a permanent concern. Samana said a stronger dollar will push prices down, after which retail investors will start exiting the market again.

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