10 August 2009

Gold ETF League Table

With gold looking to attack the USD 1000 level, it is fitting to review the new kid on the gold block – securitised bullion – that many say has been a contributor to gold’s resurgence. I say “new kid on the block” because gold ETFs are only seven years old whereas people have been storing wealth via gold for over 4,000 years.

The key change ETFs have brought to the market is transparency. In the past, gold was purchased in bar or coin form and either stored at home, in safety deposit boxes, or with a custodian. Problem is that all this activity was private, with no reported numbers on the volume traded or held. The ETFs, by reporting their balances daily, now provide a small window into the activities of private investors.

According to the World Gold Council’s (WGC) 2007 figures, private investors (which includes institutions) hold 16.4% of all the gold ever produced (1). Adjusting for latest mine production, this means that as at March 2009 private investment in gold totalled 865 million ounces.

The table below shows all the ETFs and other non-listed custodian facilities who publish regular figures on their holdings. This data has been sourced from http://www.sharelynx.com/, who is the guru for data on gold. Sharelynx tracks all of these products daily and has built an extensive history on their movements, making it an essential subscription for any serious analyst of the gold markets.


Gold OuncesAs at July 2009% share of Total Privately Held Gold
Gold Bullion Securities40,465,4454.7%
Zurcher Kantonalbank4,738,3970.5%
ETF Securities2,716,2820.3%
ishares2,323,6770.3%
Julius Baer1,849,3750.2%
Central Fund/Trust of Canada1,571,0370.2%
Xetra Gold1,019,5400.1%
Bullion Vault583,7050.1%
GoldMoney425,1680.0%
Claymore366,0000.0%
Bullion Management Group92,5440.0%
Benchmark (India)68,6740.0%
e-Gold68,2080.0%
GoldIST Turkey46,7800.0%
UTI (India)46,1360.0%
Reliance Captial (India)38,9350.0%
SBI (India)23,9200.0%
Kotak (India)11,0600.0%
Quantum (India)1,9610.0%
Gold "Products" Sub-total56,456,8446.5%
COMEX9,140,6461.1%
TOCOM180,4640.0%
Total Other Privately Held798,816,80092.4%
Total Privately Held864,594,753100.0%


This table clearly shows that Gold Bullion Securities (listed across many exchanges) is the “King Kong” of gold products. What is more interesting is that it only represents 4.7% of the total amount of gold held by individuals and institutions. Even including in the reported physical inventories of the COMEX and TOCOM futures markets only brings us to 7.6%.

While this is a small “market share”, compare it to the situation five years ago. In July 2004 there were only five visible gold products totalling 2.4 million ounces. Combined with COMEX and TOCOM inventories, this amounted to less than 1% of privately held gold.

The other interesting feature of this table is the small size of the ETFs listed in Turkey and India. GoldIST has been around since 2004 and the Indian ETFs first appeared in mid-2007. By July 2007, there was 141,271 ounces in ETFs across both of these countries. Two years later is it a mere 237,466 ounces. Compared to the considerable size of the physical gold markets in these countries, this is not an impressive performance and shows their continued preference for physical over paper.

3 comments:

Alan von Altendorf said...

Bron, I suppose I'm quite dense. What is the line item 'Total Other Privately Held'?

Bron said...

That line is just a derived figure, the difference between the Total Privately Held and the balances of all the ETFs & warehouse stocks. It could be titled "Unknown/Invisible Gold Holdings". It would include physical bars and coin held in Swiss banks, in people's homes, safety deposit boxes etc.

Anonymous said...

ETF's HAVE gold (and silver)?


Bwa ha ha - Don't make me laugh.