StreetTracks Gold Shares, one of the biggest Gold EFTs around, saw redemptions of 21.51 tone of gold worth over 600 million dollars last Wednesday. Current holdings of StreetTracks totals 631 tones or twice that of the Bank of London.
This would account for the drop in gold as greedy investors decided to cash in and walk home with the dosh.
In fact gold futures dropped 3 percent at one point and caused some order imbalances on the electronic exchanges according to some traders.
The selling came immediately after gold topped the 900 dollars mark in New York.
ETFs have come along way since the first gold EFT opened on the Australian Stock in 2004.
Shortly after that time, analysts, such as Michael Porter for Lipper USA, voiced the expectation. "I expect this to be a blockbuster, because a lot of institutional investors who might not have been mandated to own gold other than mining stocks will finally be able to get directly involved in the gold market," Lipper told reporters.
Never has this prophetic statement been so true as recently demonstrated by the StreetTracks investors taking a profit.
Some analysts are expecting those investors to start buying in again now the price has dropped.