UBS found some signs that global gold holdings of exchange-traded funds are stabilizing.
ETFs rose by 166,000 ounces in August, much of
it in the second half of the month. So far for the year, global
holdings are down by 4% or 2.09 million ounces.
However, the decline is less sharp than full-year outflows of 9%, or 5.24 million ounces, in
2014.
“Further signs of stabilization in gold ETF holdings so far this year are encouraging,” UBS says.
This implies that while some adjustments may be needed when the Fed starts to hike, the bulk of the fine-tuning has likely already happened.
“The
aggressive liquidations two years ago were likely dominated by
investors who were looking to reduce or exit long-term gold positions
that were initially put on in light of the Fed's QE (quantitative
easing).”
After that, gold ETFs have seen more two-way traffic,
particularly so far in 2015.
These swings suggest that "while there are those who are continuing to refine their gold exposures, there are also others that are once again starting to get attracted by gold's long-term value proposition,” UBS says.
