One of gold’s primary drivers is American stock-market capital sloshing into and out of gold through major exchange-traded funds. Their sustained inflows and outflows partially fuel gold’s bull-market uplegs and corrections. Interestingly the differential gold-ETF-share selling that exacerbated gold’s recent correction is greatly slowing. Gold’s next upleg depends on those capital flows reversing to buying, accelerating its gains.
Gold’s largest and most-popular exchange-traded funds are increasingly coming to dominate gold price trends. Cheap and easy to trade, they act as direct conduits for the vast pools of stock-market capital to access gold. Stock traders use these gold-ETF shares to instantly gain or shed gold exposure in their portfolios. The collective capital flows through gold ETFs are responsible for ever-more of gold’s price action.