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Saturday, February 16, 2013
Soros et al sell gold ETFs
Mineweb - Soros et al sell gold ETFs. This was the big news this week, which might have had a negative effect on gold and the miner ETFs - Q4 saw some big funds cut down their gold positions.
As Jojo reminded me, the important thing is that this selling was done in Q4 - i.e., it already happened. And y'know what? It would have been smart, since then you could move your money into the SPY at the November bottom!
Also, it's important to note that Friday was OpEx, where all sorts of selling occurs for skanky reasons; and it's also a rumour on the bulletin boards that a huge amount of selling this week was due to redemptions (supposedly Sprott got crucified as their clients were driven away by the stench of ignorant hyperbole), and even margin calls.
(Speaking of which, I thought something was funny when looking at the big dump in the daily chart of Dundee Precious Metals - it's a stock with massive robot participation and very little retail, as you can tell if you try and buy because they'll game the price away from your bid. That one stock's action is often a giveaway that the big boys are doing something.)
And, of course, every miner except Goldcorp came out with gruesome year-ends that included massive writeoffs. (Funny enough, Goldcorp was also sold down, despite a supposedly decent quarter, which is also interesting).
Brent Cook's Feb 13 missive would also have had a negative effect on sentiment.
It's almost like the perfect storm for gold and its miners. So, now you have to ask how much worse can it get?
In a way it depresses me, but in another way the sentiment around the miners is about as bad as the sentiment around BP was in summer 2010, when everyone thought they were going to have to go bankrupt after destroying the Gulf of Mexico. That would have been a fantastic time to buy BP.
So I can see how much things suck. But, again, same as with my opinion of the US economy, you have to ask: what is the forward outlook for miners at this point in time?
I'm not interested in buying back in while stocks are going down. But I'll be happy to buy back if they start going up, and that really should happen sometime, no?
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Soros isn't the only one selling ETFs:
ReplyDeleteCinthia Murphy on Seeking Alpha today:
"The $67.5 billion GLD and the $8.7 billion IAU were each trading about 1.5% lower early in the session, extending losses that now have cost each of the funds roughly 5% of value in the past five days alone.
What's more, GLD's price action has come accompanied by net outflows of $362 million, while IAU has lost some $146 million in the same one-week period."
That's half a billion of gold sales in just one week from two ETFs. You need a lot of Chinese and Indians to compensate for that.
No you don't. That's less than one week's worth of Indian gold demand.
DeleteNext time, before making such a statement, open up the most recent WGC report to look up Indian gold demand, and then do a bit of math in Excel.
Because you can be fucking sure that Seeking Alpha don't fucking bother.
PS India, that land of poor people, would still be able to consume the entirety of GLD in a little over 3 years just to make jewelry. Assuming GLD's gold exists, of course: when you ponder the size of their gold consumption relative to GLD you really have to wonder if the goldbug wackaloons aren't too far off base.