Gold Outflows Hit Record Pace, Short Squeeze Risk Looms
Gold funds saw $2.3 billion in outflows last week, the fourth consecutive weekly withdrawal. The four-week average of $2.0 billion is the second-largest on record, and the largest gold ETF GLD is on track for its first annual outflow since 2023, setting up conditions for a possible short squeeze.
Gold funds recorded a net outflow of $2.3 billion last week, extending the streak of weekly withdrawals to four straight. The four-week moving average of outflows now stands at $2.0 billion, the second highest on record, behind only the $3.5 billion average seen in February.
The largest US gold-backed ETF, GLD, has seen $2.2 billion in outflows so far this month, putting it on track for a fourth consecutive monthly decline. Year-to-date, GLD outflows total $8.1 billion, which would be the first annual withdrawal since 2023.
Despite the persistent selling, the report notes that conditions are ripe for a short squeeze, implying that bearish positioning could unwind sharply if sentiment shifts.
Source: The Kobeissi Letter