Monday, 14 May 2012

Retail gold ETF attracts 10 fold more buying than selling

As the gold price continues to fall I rather urgently need to assess my position. However some UK retail gold investors seem to be pretty clear that today presented a buying opportunity. 

The (allegedly) most popular physical gold exchange traded fund for retail investors -  the ETF Securities sterling denominated fund with the London Stock Exchange ticker PHGP -  has seen buyers spending nearly 10 times more than sellers have sold today. With £5.2 million worth of shares bought by investors compared to £650,000 worth of shares sold. (The most popular retail gold ETF? dealt with below)

(Click on images to expand them)

There were a few trades over the £1 million mark which helped achieve this so it was not really the voice of small players like me.

This bullishness is not shared by the UK's institutional ETF traders who are either sellers - which is the case for the PHAU, which is exactly the same as PHGP but denominated in dollars (although investors can still only buy and sell it in pounds)

Or less enthusiastic buyers as per Gold Bullion Securities GBS - a fund which cannot be included in tax free Individual Savings Accounts.

 Last week's falls saw massive volumes shifting on the Source physical gold ETF SGLD but today there was very little going on.

At the end of trading today I wanted to check how much I would have had to pay Hargreaves Lansdown for 10 more PHAU shares. I'm not sure if there was a glitch in the system or too many people having the same idea - but I was unable to:

Luckily I didn't actually want to buy anything. I've decided to hang on until it's clearer what's going on and also to work out my position intellectually.  It is something that I find almost any excuse to avoid! However I aim to spend some time it on now.

BullionVault, as usual, has a comprehensive looking assessment of the global gold market.

Is PHGP the most popular gold ETF for retail investors?

That does appear to be the case. Weekly statistics published by LSE showed that last week PHGP made up for 10% of all exchange traded product trading on the LSE, more than PHAU (9.5%) - click on the image above to expand. But by value each trade was a lot smaller which suggests lots of small investors using this product:

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