Introduction
As we very well know, 2013 was a difficult but also puzzling year for
precious metals investors. The price of gold, silver and their related
equities declined by a significant amount while demand for physical
bullion from emerging markets and their Central Banks was exceptionally
strong.
A common argument that has been made to explain the precipitous
decline of the price of precious metals in 2013 is of investors’
disenchantment with precious metals, which had been piling up in
exchange traded products as a way for investors to gain exposure to the
metals. Proponents of this theory point to the large declines in the
total holdings of those ETFs as evidence of investors fleeing the
precious metal trade.