The holdings of the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust GLD, fell for a second day on Friday, recording its largest two-day drop since early September, as easing economic concerns sapped demand.
The SPDR's gold holdings had been climbing rapidly since early this year on safe-haven demand, and analysts were split on whether the two-day fall signaled a broader change in investor sentiment towards gold.
"It's too early to say if real investor demand has peaked because I think the drop is due to an outflow of short-term funds, the type of money that entered SPDR when its holdings were rising sharply," said Yuichi Ikemizu, Tokyo branch manager at Standard Bank Plc.
The SPDR's holdings fell to 1,105.98 tons on April 17, down 13.45 tons on the day - the largest one-day drop since Oct. 3 - and down 21.7 tons over two days, the largest two-day fall since early September.
Spot gold fell as low as $864.00 on Friday, a level last seen on Jan. 23, pressured by a rise in the dollar, gains in stock markets and signs of a slowdown in investment demand.
"I think the fall below the key technical level of $885, as well as a rise in share prices among other factors, may have triggered short-term money being pulled out of SPDR," Ikemizu said.
In the first four months of 2009, the SPDR's holdings have gained 44%, compared with a 2% increase in the same period last year.
The SPDR's gold holdings had been climbing rapidly since early this year on safe-haven demand, and analysts were split on whether the two-day fall signaled a broader change in investor sentiment towards gold.
"It's too early to say if real investor demand has peaked because I think the drop is due to an outflow of short-term funds, the type of money that entered SPDR when its holdings were rising sharply," said Yuichi Ikemizu, Tokyo branch manager at Standard Bank Plc.
The SPDR's holdings fell to 1,105.98 tons on April 17, down 13.45 tons on the day - the largest one-day drop since Oct. 3 - and down 21.7 tons over two days, the largest two-day fall since early September.
Spot gold fell as low as $864.00 on Friday, a level last seen on Jan. 23, pressured by a rise in the dollar, gains in stock markets and signs of a slowdown in investment demand.
"I think the fall below the key technical level of $885, as well as a rise in share prices among other factors, may have triggered short-term money being pulled out of SPDR," Ikemizu said.
In the first four months of 2009, the SPDR's holdings have gained 44%, compared with a 2% increase in the same period last year.
