There had seem to be something of a pullback in sales out of the major gold ETFs but this seems to have come to its end, and sales have resumed, albeit at a lower rate. The biggest gold ETF – SPDR Gold Shares (GLD) reports a sale of almost 4 tonnes in its latest figures, which brings its gold holding down to 905.99 tonnes – a new low for the ETF. The previous low had been recorded on August 8th at 909.33 tonnes. In between then and now holdings had increased to 921.03 tonnes just before the U.S. Labor Day holiday, but since then have been drifting back. The latest 4 tonne fall has been the largest single day decline since then.

Germany’s Commerzbank notes that on Friday alone 4.7 tonnes of gold were sold off, from all the gold ETFs (with GLD obviously providing the bulk of these sales) which the bank reckons could be accounted for by the end of the quarter approaching.

The bank says that the gold ETFs monitored by Bloomberg now hold 1,930 tons, which is the lowest figure since May 2010.

While the latest decline in ETF gold holdings is not significant enough to suggest the kinds of falls seen from the peaks of around December 2012 when the GLD ETF held over 1,350 tonnes, it is enough to create further uncertainty for gold holders, particularly in the light of some pessimistic forecasts by some analysts – notably from Goldman Sachs – although there have been other mainstream analysts looking for a better performance.

See: Goldman warns gold could fall to $1,000 or lower. HSBC disagrees

The big question facing the gold investor is whether the ETF outflow will continue, or whether this is just a further downward blip and the holdings will stabilise again. Certainly the momentum of sales has reduced quite dramatically over the past couple of months. There is the impression that the strong holders of gold will remain invested in the ETFs as longer term insurance against collapses elsewhere, while most of the weak holders have been shaken out.  However, if the Goldman forecast proves to be correct – and this could, as we’ve noted before, be a self-fulfilling prophecy given the awe in which Goldman Sachs is perceived in financial circles, then we could see the beginnings of another ETF gold holdings decline. It also remains to be seen whether Eastern demand continues to be able to soak up all the gold flowing from the West – and more. 

There are others who are perhaps a little more positive on gold. Former Mineweb correspondent, Rhona O’Connell, who is now the Head of Metals Research and Forecasting at Thomson Reuters GFMS is looking for a gold price edging towards $1500 by early next year on the back of a pick-up in jewellery demand, but overall still sees gold averaging around the same price as at present over the full 2014 year – and of course there are the mega bulls like Eric Sprott, James Turk, Jim Sinclair, John Embry et al. who are all looking for huge jumps in the gold price ahead. They may well prove right in the long term, but in the short to medium term, the gold price remains volatile and could move either way probably very much dependent on U.S. wrangling over the debt ceiling and any decision by the fed to taper its QE programme – or not as the case may be, and the odds don’t seem to favour a massive increase soon!