Billionaire Soros and Daniel Loeb sold their entire investments in the SPDR Gold Trust, the biggest ETP in the metal, last quarter, SEC filings showed. Soros Fund Management LLC’s shares were valued at $63.2 million as of June 28 and Loeb’s Third Point LLC holding were valued at $15.5 million at the end of the period, according to data compiled by Bloomberg.

Wealth Management

Growth in demand may be constrained in the second half by a lack of supply, with the cost of borrowing gold for six months close to a four-year high. The London Bullion Market Association says that may indicate a scarcity of metal. The Indian government has sought to curb bullion imports to combat a record current-account deficit and weakening rupee.

“What frightens me is this is not going to be sustained,” said Dominic Schnider, the Singapore-based head of commodities research at the wealth-management unit of UBS, which anticipates a 2014 average of $1,325. “It’s one thing that demand expanded over a short period of time. Maintaining it is another thing. To what degree we have seen demand being brought forward and then weigh on the second half is unclear.”

First-half sales at Caibai Jewelry exceeded 10 billion yuan ($1.6 billion), from 12.5 billion yuan in all of 2012, marketing manager Shi Lei said in an interview at the four-level Beijing store. The Shanghai Gold Exchange delivered 1,098 tons to buyers in the first six months, from 1,139 tons for all of last year, bourse data show.

Mining Companies

While three increases in India’s bullion import taxes may reduce official volumes, actual sales may be boosted by a surge in smuggling. Customs agents at Mumbai airport confiscated gold valued at 93 million rupees ($1.4 million) from April to June, almost as much they seized for all of 2012, according to data from the customs department’s Air Intelligence Unit.

The slump forced mining companies to announce at least $26 billion of writedowns in the past two months, adding further constraints to supply. Toronto-based Barrick Gold Corp., the biggest producer, said Aug. 1 it may sell, close or curb output at 12 mines from Peru to Papua New Guinea. Production isn’t sustainable at prices below $1,250, Gold Fields Ltd. Chief Executive Officer Nick Holland said in an interview in June.

Mounting concern about availability is reflected in futures, with the August contract on Comex in New York flipping to a premium to December this month for the first time since they started trading. The backwardation in commodities indicates worries about near-term supply.

Gold Council