the puke indicator, page-7

The Puke continues: GLD has lost another 12tons, latest inventory 1258.40tons.

Real gold buyers are taking advantage of the depressed gold price to obtain physical gold via GLD redemptions. They buy up multiples of 100k GLD units on the secondary market, turn these units to GLD trustees, and demand physical. This is how and why GLD inventory drops, a reflection of real physical demand. It has nothing to do with investors selling GLD on the secondary market. Secondary market selling or buying only affect the price but not inventory level. Only redemption of existing or creation of new units (when GLD receives gold) can cause changes to GLD inventory levels.

When GLD inventory rises, it is not bullish because someone turned real gold into GLD units. It is actually bearish when GLD inventory goes up, for more GLD units means supply of trading units has gone up, and it also helps fractional bullion banking, hypothecation, re-hypothecation etc of paper gold, it helps shorting paper gold easier. But when GLD inventory declines, especially larger declines, it is due to real gold buyers, hoarders, taking away real gold from GLD, removing gold liquidity, thus drains the reserve of gold fractional market.

Please refer to the link to the VTC artile I provided at the top of the thread for more details.

Fofoa reckoned that a loss of 100tons in a quick fasion (say in one day) will probably be a signal of severe confidence collapse, for it will be very serious players who can take away 100tons of gold, and probably someone within the system. it means the end of the paper gold market, and gold price discovery will revert back to physical and physical only market.