(Bloomberg) -- Gold assets held in the world’s largest exchange-traded product backed by the metal tumbled by the most since June 2013.
Holdings in SPDR Gold Shares dropped 16 metric tons to 965.22 metric tons on Tuesday as U.S. equity markets reached record highs. The drop comes after assets in the ETF jumped by 50% this year, headed for the biggest yearly gain in a decade.
Gold is up 27% this year, the best start since 1979, as slowing global economic growth and the fallout from the U.K. decision to leave the European Union boosted the metal’s appeal as a haven. Investors have taken a breather this week as surging equity markets and easing growth concerns diminished demand for bullion.
"I think a lot of investors decided to sell their gold and get into stocks," James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. "The stock market reached all-time highs, and that’s when individuals get in."
Gold futures for August delivery climbed 0.6% to settle at $1,343.60 an ounce at 1:48 p.m. on the Comex in New York. Prices fell in the previous four sessions.
Gold has rallied more than 6% since the U.K. vote to leave the European Union. The decline in ETF holdings may be a temporary pause rather than a sign of fatigue in the rally, said Carsten Fritsch, an analyst at Commerzbank in Frankfurt.
The ETF decline was a reflection of "improving stock markets, but I don’t think this will be the start of a new trend," Fritsch said in a telephone interview. "I think it will only be a one-off event."
In other precious metals news:
Silver futures for September delivery gained 1.2% $20.413 an ounce on the Comex. On the New York Mercantile Exchange, palladium and platinum increased.