Holdings declined in July in exchange-traded funds that focus on gold.
At least part of the strong demand for gold ETFs from early in the year appears to be easing as credit-market concerns abate, inflation remains contained and investors look to capture profits.
Some observers see the trend as a temporary phenomenon, while others say it might be at least somewhat worrisome for gold bulls.
Suki Cooper, precious-metals analyst with Barclays Capital, said the net redemptions in the 15 ETFs tracked by her company are down around 40 metric tons in July to 1,659.4 metric tons.
The outflows are on a pace to be the most since April of 2008.
Holdings in the largest gold ETF, SPDR Gold Shares (trading symbol: GLD), were down 47.68 metric tons from the end of June, according to data through Wednesday on the fund's Web site. They fell an additional 10.38 metric tons Wednesday to stand at 1,072.87 metric tons.
"It indicates there is a little bit less speculative fervor in the market," said Bill O'Neill, one of the principals with Logic Advisors. "There wasn't a willingness to chase this market as it went back up to the $950 level."
Ms. Cooper said that buying into gold ETFs was unprecedented in the first quarter, when there was strong haven demand for gold, due to macroeconomic worries plus weak performances in other asset classes. The GLD ETF alone had a net inflow of 347.21 metric tons in the first quarter.
Most investors in gold ETFs tend to be buy-and-hold investors rather than short-term speculators, Ms. Cooper said.
Still, "as we started to see better economic data come through and a more positive performance in the equity markets, inflows slowed down and this month actually turned into outflows," she said.
While ETF holdings have declined, they remain historically high, said Carlos Sanchez, associate director of research with CPM Group.
"The decline is a small percentage of overall holdings," Mr. Sanchez said. "This may be just some investors trying to take some profits."
Franklin Resources Shows Improvement
Franklin Resources on Thursday joined the growing crowd of money-management firms that have reported much-improved quarterly results compared with the previous two quarters.
While profit in its fiscal third quarter fell to $297.7 million, or $1.29 a share, from $403.3 million, or $1.71 a share, in the year-ago period, net income returned to levels last seen in September 2008, while earnings per share were the best since June 30 last year.
Revenue in the latest quarter was $1.07 billion compared with $1.52 billion in the same quarter of 2008.
Revenue in Franklin's fiscal second quarter was $912.3 million.
Assets under management for the San Mateo, Calif., firm were $451.2 billion as of June 30, a rise from the previous quarter's $391.1 billion, but down from the year-ago level of $580.2 billion.
Much of the rise in assets, $54.7 billion, was due to market appreciation.
The firm said it saw net new inflows, or buying, of $6 billion, compared with net new outflows of $5.5 billion in the previous quarter.
Franklin's best-selling fund during the latest quarter was Templeton Global Bond Fund (TPINX), which saw $2.3 billion in net inflows. The fund is up 11% this year.
While year-on-year profits have fallen industrywide, Franklin is the latest asset manager to beat estimates and show signs of a turnaround. T. Rowe Price Group, BlackRock, Legg Mason, Federated Investors and Janus Capital Group all have posted better-than-expected quarterly results.
