$NUGT ~ Gold Reclaims $1,250; ETF Holdings Hit Lowest Since May 2010

The price of gold is enjoying a strong start to the week, including a 1.2% gain on Tuesday despite word that exchange-traded fund holdings are at their lowest in more than three years.

ETFs such as SPDR Gold trust (GLD) and iShares Gold Trust (IAU) and other exchange-traded products’ gold holdings have now fallen below 2,000 metric tons for the first time since May 2010, Bloomberg News’ Phoebe Sedgman and Glenys Sim report. The peak came in December, at 2,632.5 tons.

ETFs have since shed 638 tons of gold, which the Bloomberg reporters say is equal to more than a fifth of total gold-mining output during 2012.

So who’s behind the most recent buying? RBC Capital’s George Gero says fund managers are wading back in in a morning client email.

That would be a turnaround from last week’s pattern. Commerzbank notes this morning that money managers cut their net long gold positions tracked by the CFTC by 29% to 21,400 contracts in the week ending July 2 — the lowest since October 2006.

Then we’ve got the interesting story this morning, also via Bloomberg, of the gold ETF run by Mitsubishi UFJ Trust and Banking Corp. in Japan. This one has bucked the trend of panic selling and redemptions by expanding 10% by volume this year. The value of the assets it holds has fallen by 5% at a time when gold futures in yen fell 13%, according to the wire service’s Aya Takada and Ichiro Suzuki.

In gold and related ETFs on Tuesday, Market Vectors Junior Gold Miners ETF (GDXJ) and Market Vectors Gold Miners ETF (GDX) are rising by 2.1% apiece. The highly Direxion Daily Gold Miners Bear 3X Shares (DUST) is down by 5.7% while Direxion Daily Gold Miners Bull 3X Shares (NUGT) is ahead by 6%.


READ MORE: http://blogs.barrons.com/focusonfunds/2013/07...-may-2010/