<...the long awaited gold ETF will be arriving some time next
week (symbol: GLD).
In other words, this is not another rumor. This is now a fact. The initial offering will be $100 mil and is being underwritten by UBS.
Now, $100 mil is only about 2500 contracts. The current open interest in gold is around 340,000 contracts (the previous peak earlier in the year at the April peak was 309,000), so this is obviously a drop in the bucket. It won’t do much for gold one way or the other in the near term, but it could add incremental demand at some point obviously.
On the other hand, in the near term we could see some selling in the gold shares by people who own shares but would rather just own the physical. Thus, many equity only accounts can now buy the physical through this ETF that couldn’t before and therefore could trade in their gold mining shares for the ETF potentially. I’ve said before that I thought the arrival of this ETF might mark an important peak in the metal, so it will be interesting to see if the dollar accelerates its decline between now and its arrival next week to give us some sort of panic low and a blowoff peak in the metal (assuming it blows off with the dollar, which it might not).>
Message 20756498
(Just passing this along to threadsters, FWIW. All quoted from Lance Lewis website, on another SI thread.) |
