In yesterday’s Scouting Report on Bubbles, Chuck in Belize opined:
I want to lend some additional context and possible data to expand on bullet point #2 above.
Before I go there, my spidey senses have been jangling around gold lately because it has been going up quite independently of other things like the dollar going down or oil going up. That independence is quite rare and so worth poking into a bit.
Here’s something that may be meaningful – the price of gold (black line) and the actual gold holdings of gold ETFs:
Whuuuut?
Since when does the quantity of gold in ETFs go down when prices are rising??
When does this happen for anything? The reason prices go up for anything is because there are more buyers than sellers.
But not when it comes to gold? Now we’re supposed to believe that since the price of gold bottomed out at 1625-ish in the first & second quarters of 2022 that the ultra-tight relationship between GLD-held assets and the price of gold…decoupled?
Hmmmm. I’m not buying it.
Here’s the math.
From the rise from $1625/Oz the number of ounces in GLD has fallen by (95 – 82.3)/(95) = -13.4%
Meanwhile, the price of gold has risen by +30.7%
I would remind people here that if you own GLD you do not own gold.