Recently I had a question come in about whether demand created for gold by the ETFs could have been behind the recent move up in the spot price. This subject has come up before on this blog and clearly this has played a role.If there were no ETFs there would be far fewer people with direct access to gold. That GLD and IAU exist at all creates a demand that I believe would not otherwise exist. I found this table through one of my RSS feeds.
The tonnes owned by GLD and IAU adds up to 285. There are also gold ETFs in the other countries on the table. Incidently I know that the UK and Australia had gold ETFs before the US did, but I am not sure about South Africa.
I have touched on this before. I think that as more ETFs for other commodities get created we will see demand distortions there as well. The effect created could be big price increases for things like oil, copper, silver and some of the soft commodities that will be included in the Deutsche Bank ETF (DBC).
I realize that all of these have had big moves already. While there is no way to know for sure, I don’t think these markets can price in a future buying demand of this sort.
3 comments:
No figures on gold holding in Canada? Central Gold trust holds bullion for Canadian investor, I believe.
Do you know when DBC is coming online to purchase? I have looked and can find no date.
Thanks!
Is central gold Trus the same thing as Central Fund of Canada? If not, I owuld ask is it technically an ETF? Or something else?
I do not not know when DBC will get listed.
thanks for making me look closer. The trust holds bullion for unit holders--it doesn't track an index it uses the price of gold times the number of ounces held.
However, I figured out the storage and administrative fees and they are three percent of market cap--pretty high. I will look at IAU and GLD.
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