Gold ETF ouflows possibly also due to physical deliveries

via Commerzbank 
Continuing ETF outflows are weighing on the price of gold. Investors have withdrawn a good 24 tons of gold from ETFs in the past two days of trading. For the most part, the outflows have affected the world’s largest gold ETF, the SPDR Gold Trust. Its holdings have plummeted by 12.5% since the beginning of the year, and currently find themselves at their lowest level since May 2010. Some of the outflows are likely to have been due to physical deliveries rather than solely to shares being sold. This is suggested by the fact that we have also seen a significant reduction in COMEX stocks recently, meaning that gold has been physically delivered on the futures market too. This would point to investors displaying an increased preference for security. 
According to the China Association of Automobile Manufacturers (CAAM), 1.59 million cars were sold in China in March, which is a good 13% up on the year-on-year figure. At the same time, this was the second-highest monthly figure ever following the record level achieved in January. Car sales have clearly recovered from their poor performance in February, when figures were dragged down by the New Year festivities. That said, Chinese dealers also offered considerable discounts in a bid to boost car sales because of the high stock levels. The discounts may have been reduced again as the new quarter has got underway. Nonetheless, the trend towards robust car sales in China is likely to continue during the course of the year, which should lend support to platinum and, above all, to palladium.