Massive GLD Outflows Show U.S. Middle Class Is Broke Says This Expert

The middle class is selling their gold to buy iPhones and pay off debt says Echobay's Lanci.
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Gold is up 6% since the Fed raised rates last month, despite net outflows in SPDR Gold Shares, (GLD), the world's largest exchange-traded fund, said Vince Lanci, founder of Echobay Partners.

ETF investors were net sellers of 4.35 tonnes in December after leaving their holdings broadly unchanged in November (+0.75 tonnes) and October (-0.79 tonnes), Lanci explained.

"GLD has reduced holdings, about 10 tons over the last three to five weeks. What you're seeing is small [retail investors] get out, while larger funds are buying futures at the same time," Lanci said in an interview on Wednesday.

"The outflows are a function of people that need to sell gold to buy iPhones and pay their expenses," Lanci highlighted.

Recently, GLD snapped its longest winning streak ever. It rallied for 11 straight days before dipping into the red last Wednesday, marking its longest string of positive sessions since 2004, the year it was created.

February Comex gold was last up $3.30 an ounce at $1,322.70.

This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.