Loading ...The Link Between GLD Holdings and the Gold Price
Adam Hamilton is a PermaGoldBull doesn’t get much airtime here BUT
This typically Verbose Article he published at Seeking Alpha ( free subscription needed ..and it is worth it)
Explains this important link very well.
The Jury is still out. Who is the Jury? The Jury is the existing NL on all these PM stock/gold indexes. We are at the NL and playing with it. Could go either way. But go back and look at the oil breakdown back in July 2014. It played with that NL for 5 weeks and then finally gave it up, so we have to be patient. Which way does it go? I certainly don’t know, but I am playing it safe.
i am still waiting for that 1:1 dow gold ratio that those perma gold bulls
promised us once upon a time.how about the 10,000 number!?.that is a lot of gld buying
🙂
Fully, I am sorry, but I just cannot take Hamilton’s only-bullish perspectives seriously. He LOVES to come up with any reason to be bullish, but most of it is just crap. I know I am in the minority, but this guy has only one direction, and its up.
Avi…What part of ” He Doesn’t get much airtime here” was unclear.
You are not in the minority here .
He doesn’t get much air time here because he is a Perabull. Not the usual “Manipulation all day every day” Permabull… but yes ALWAYS Bullish and following him is hazardous.
However this piece on GLD was excellent. We learned a lot from that research.
GLD,, no mater how flawed an instrument we as “Purist Goldophiles” believe it is. It is THE one most Important metric on how the Gold market is Doing.
Almost invariably the GLD Holdings mirror the POG ! Except for the last few months. That is surprising , and it may be unsustainable ( which he doesn’t point out .) But this is important info he presented in this particular piece .
At best, one could consider it a lagging indicator. . . but I just wrote an article about this wherein I question:
For quite some time, I have been hearing about how it is appropriate to follow the draw-downs and builds in the GLD ETF as a directional cue for gold price. But, the “logic” of this perspective always escaped me. Should we not expect that, if people are selling the GLD, draw-downs would be seen, and if people are buying the GLD, builds would be seen? Would that not make this “indicator” a lagging one, at best, and clearly not a leading indicator?
Well, recently, we have seen a 7.5% rise in the price of the GLD, which means people have been buying. Yet, since gold bottomed, GLD’s holdings have fallen another 4.4%. So, not only is it not a leading indicator, one cannot even say it is a lagging indicator either. Rather, this indicator has now shown itself to be completely useless and irrelevant.
And, yes, its proponents are left scratching their heads, just like all those that expected all the other perspectives to lead the way for years. Yet, amazingly, the conclusion many come to is not that it is a useless gauge of forward price direction. Rather, some simply conclude “just you wait until the builds come and then you will see a price rise.”
update!
http://www.mining.com/top-gold-etf-breaks-record-losing-streak/
True he is a permabull but to his credit he did say the market was overheated and called for a major correction last summer. That was something we did not hear many calling for at the time.