Gold bugs push their biggest ETF above what it's worth



As The Market Ear noted, GLD and SLV are trading at a significant premium to net asset value. This is to be expected given investors' and traders' headlong rush towards precious metals.

Looking at a longer-term version of this indicator, GLD premium to Net Asset Value (NAV)'s 100-day average is at the 3rd highest level of all time. The last 2 spikes occurred during the previous 2 precious metals bull markets: 

Gold GLD premium to net asset value

Those 2 historical cases saw gold climb further in the short term (animal spirits!) before a multi-month pullback/correction began. 

The annualized return for GLD is actually higher when the premium is above .15% than it is when the fund is trading at a persistent discount. While some of the extremes in premium/discount preceded peaks/troughs in gold, respectively, trying to identify those peaks/troughs in real-time proved inconsistent. 


This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.

We also looked at:

  • The silver ETF, SLV, is at an extreme premium to its net asset value, too
  • We keep seeing odd breadth readings in big up days in the S&P 500
  • Gold and silver are nearing a near-historic extreme above their short-, medium- and long-term moving averages
  • The VIX term structure is hitting new lows for this move
  • The Nasdaq has been extremely volatile, what that's meant before

The post titled Gold bugs push their biggest ETF above what it's worth was originally published as on SentimenTrader.com on 2020-08-07.

At SentimenTrader.com, our service is not focused on market timing per se, but rather risk management. That may be a distinction without a difference, but it's how we approach the markets. We study signs that suggest it is time to raise or lower market exposure as a function of risk relative to probable reward. It is all about risk-adjusted expectations given existing evidence. Learn more about our service , research, models and indicators.


Follow us on Twitter for up to the minute analysis of market action.


Not ready to signup up for a free trial yet?

Signup for our Daily Lite email to receive highlights of our daily report, research and studies.


Follow us on Twitter:

Subscribe to our Youtube Channel:


RSS Feed

Subscribe to the Blog RSS feed

Tags