The Weird Reason Gold Will Head Still Higher

Oddly, ETFs that track the yellow metal aren’t gaining new money, a paradoxical bullish sign, says market sage.


When gold prices rise, especially after a tumble, fresh money usually rushes into the exchange-traded funds (ETFs) that track the shiny metal. Not this time, though.   

The well-respected newsletter, McClellan Market Report, finds that the two biggest such funds, SPDR Gold Shares and iShares Gold Trust, aren’t getting investor inflows—they’ve been flat for a while.

The analysis concludes that’s a bullish sign for bullion. Historically, of course, gold benefits amid economic turmoil, like what the coronavirus triggered last spring.

“What that means is that the rise in gold prices has not reached the consciousness of the public, not yet anyway,” wrote Tom McClellan, the newsletter’s chief. “And that implies there is more yet to come for the gold price rally.” 

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In price terms, gold is up from its recent low in March, but far below its all-time pandemic-propelled peak reached last August. Last summer, gold hit its apex of $2,051 per ounce. But as optimism about ending the virus swelled, gold fell to $1,698.

Lately, though, the trend has bent upward once more. Gold closed in Tuesday’s trading at $1,868, up 10% from the recent bottom two months before. The World Gold Council, a trade group, attributed the turnaround to renewed concern about climbing inflation (the Consumer Price Index jumped 4.2% year-over-year in April) and interest rates.

Another possible factor in the metal’s bounce back, some Wall Streeters say, is the waning of gold’s new virtual rival, Bitcoin. Often called “digital gold,” the cryptocurrency has taken a dive since mid-April, down by almost a third. That may be owing to the sense that Bitcoin has gotten ahead of itself, rocketing to six times its value a year ago. Or the souring of big-name investors in the currency, like mogul Elon Musk.

Speaking of the two gold ETFs, McClellan wrote that investors liked to “push money into them and pull money out as gold prices rise and fall. The real fun comes when investors don’t follow that model.”

The delayed reaction of investors toward gold’s increase is paradoxical, but a reason for optimism, he wrote. In his view, “it means that the crowd has not yet gotten in on the rebound in gold prices. They are not yet believing in it.” 

The upshot is “the uptrend is not mature yet. It still has more to go, before we get to the point when everyone starts piling in.”

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Diversity Demands from NYC Pension Overseer OK’d at DuPont, Union Pacific

Similar proposals will land at other companies, including American Express and Procter & Gamble. 


Two shareholder proposals from the New York City comptroller regarding corporate diversity disclosure have won. They called on Dupont and Union Pacific to publicly disclose the makeup of their labor force by race, ethnicity, and gender.

The shareholder proposals mark the beginning of other similar bids that will make their way to company meetings later this year, New York City Comptroller Scott Stringer said Monday. Other firms targeted by the city retirement system include American Express and Procter & Gamble.

Both DuPont and Union Pacific were opposed to public diversity disclosures, despite declaring that they valued diversity last June, according to the city comptroller. Stringer, who is running for NYC mayor in the June primary, represents the New York City Employees’ Retirement System, Teachers Retirement System of the City of New York, and New York City Board of Education Retirement System.

Regardless of the alleged opposition, shareholders at both firms voted overwhelmingly for the shareholder proposals, Stringer said. A call to publicly release EEO-1 reports at DuPont won more than 84% of the shareholders; at Union Pacific, the proposal won 86% of votes.

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An EEO-1 report requires that the companies break down their workforces by race, ethnicity, and gender across 10 employment categories. These include senior management, as well individuals within two reporting levels below the chief executive officer.

“Today marks a major victory for investors, for pension holders, and for the advancement of diversity and inclusion across corporate America,” Stringer said in a statement. “Companies are strongest when they reflect the full diversity of our workforce. Shareholders overwhelmingly voted for disclosure that will provide them with critical information to hold these companies accountable.”

A majority of S&P 100 companies have committed to disclosing their EEO-1 data since last summer. By December, just under a quarter of firms had yet to disclose their diversity data. 

Related Stories: 

Diversity, Inclusion, ESG Are Key Focuses for Headhunters Seeking CIOs

Keeping Diversity Discussions from Becoming the Third Rail with Shundrawn Thomas

Diversity Efforts at Private Equity Firms Have a Long Way to Go 

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