SPDR, the world's largest gold investment fund, has significantly reduced its gold holdings, selling 58 tons in the first half of the year. This includes an additional 15 tons sold this week, according to a newly released report. The fund consistently sold 4-5 tons daily amidst a less active global precious metals market.

The fund's current gold holdings stand at 1,007 tons, the lowest level since September last year. Compared to the global price peak at the end of January, SPDR has sold a total of 80 tons. This decline in holdings and market value has reduced the fund's asset value to less than 130 billion USD, a sharp drop from its record 189 billion USD set earlier this year.

SPDR, the first gold exchange-traded fund (ETF) traded in the US, holds the largest asset size globally. While the fund does not directly determine gold prices, its transactions serve as a key indicator of international investor sentiment towards the precious metal. SPDR's buying and selling trends provide an early signal of market sentiment, especially during periods of sharp price fluctuations.

For instance, in January, the fund net bought more than 20 tons of gold. This coincided with a period when global prices surged, consistently setting new records and reaching 5,626 USD per ounce on 29/1. Subsequently, SPDR gradually reduced its holdings as gold prices rapidly declined. Last week, global prices fell below the 4,000 USD mark for the first time since the beginning of the year. This downturn is attributed to a stronger USD and increasing investor expectations that the US Federal Reserve (Fed) will raise interest rates as early as September, putting significant pressure on the precious metal.

People choosing gold at a gold shop in Ho Chi Minh City, 2/2025. Photo: Quynh Tran

The current gold price is 4,090 USD per ounce. Compared to its historical peak, each ounce has lost more than 1,500 USD, a decrease of approximately 27%.

SPDR has not commented on gold prices, but many other organizations have revised their short-term outlooks. Analysts at ING Bank (Netherlands) lowered their forecast for this year's average price to 4,300 USD in QIII and 4,600 USD in QIV, down from previous estimates of 4,850 USD and 5,000 USD, respectively.

According to Kitco News, Citigroup's commodity research group also reduced its three-month gold price target from 4,300 USD to 4,000 USD. The group noted that gold faces multiple pressures, including stabilizing real yields and a stronger USD in the short term. Analysts also highlighted a slowdown in physical gold demand from central banks and reduced inflows into gold ETFs, diminishing the precious metal's upward momentum.

However, Citigroup's long-term forecast remains unchanged. The group still targets a gold price of 4,500 USD per ounce for the 6-12 month period, contingent on the Fed shifting to an accommodative monetary policy or an escalation in geopolitical tensions.

Phuong Dong