Editor’s Note
This article highlights a significant shift in the SPDR Gold Trust’s strategy, moving from recent net purchases to a substantial single-day net sale. This aggressive selling by the world’s largest gold-backed ETF underscores the heightened volatility and shifting sentiment in the precious metals market.
(Dan Tri Newspaper) – The world’s largest gold ETF, the SPDR Gold Trust, has aggressively sold the precious metal amid significant market volatility.
On February 12, the SPDR Gold Trust conducted a net sale of 5.1 tonnes of gold, reducing its total holdings to just 1,076.2 tonnes. This move came after a net purchase of nearly 6 tonnes of gold over three consecutive days at the start of the week.
Prior to this, on February 3, SPDR sold 3.7 tonnes of gold; on February 4, it sold over 1.4 tonnes; and on February 5, it sold a record 4 tonnes. In total, the net gold sales across just three trading sessions amounted to nearly 10 tonnes.
Selling pressure intensified immediately after a sharp decline hit the precious metals market. During the trading session on February 12 (US time), the gold price dropped by $163 to $4,921 per ounce; the silver price fell by $9 (equivalent to 10.73%) to $75.22. This sharp decline, occurring within just 30 minutes, was considered the largest drop since January 29.
According to experts at Kitco, this decline was caused by heavy selling in technology stocks, particularly in the artificial intelligence (AI) sector, involving major companies like NVIDIA and Alphabet. This weakness quickly spread throughout the entire market, resulting in a 2% drop in the Nasdaq Composite and a 1.57% drop in the S&P 500.
Although prices saw a slight rebound later, significant pressure remains on precious metals due to the sudden decline.
Some argue that the market reacted late to recently released employment data, but the timing and pattern of sales do not fully align with this argument.
According to Kitco, in a recently released report, analysts at UBS stated that persistently declining real interest rates in the US will support demand for gold ETFs, and the expectation that central banks will continue to increase their gold reserves will also support the price of the precious metal.
According to analysis, the direct cause of recent fluctuations in gold prices was US President Donald Trump’s nomination of Kevin Warsh for the position of Federal Reserve (Fed) Chairman at the end of January.
Additionally, UBS said that this period of volatility has raised doubts about gold’s role as a hedge against geopolitical risks and market fluctuations.
Investors are awaiting the US CPI report for January, which will be released on February 13 (US time). Forecasts of a 2.5% annual increase in inflation could have a significant impact on short-term market sentiment in the precious metals market as well as other financial assets.
