Why the price smash affected GLD and SLV stocks differently

A number of bloggers have observed the difference between GLD's gold stocks and SLV silver stocks in response to the April price smash. Sharelynx is reporting the following changes over the past four weeks:

GLD down 3,031,042oz (-8.23%), current stocks 33,811,468oz

SLV down 341,111oz (-0.10%), current stocks 335,666,675oz

Sharelynx also tracks all the other major ETFs, COMEX, TOCOM, Sprott, BMG, Central Fund, Bullion Vault and GoldMoney reported stocks. The change in the total of all those over the past four weeks is:

Gold down 5,576,479oz (-6.12%), current total 85,565,264oz

Silver up 912,541oz (0.11%), current total 855,911,574oz

Whether you look at GLD vs SLV or total gold stocks to silver stocks, silver is basically holding even with gold taking a 6-8% hit. The explanation I think has a lot to do with who is investing in GLD vs SLV (or gold vs silver more generally).

Latest figures from Reuters has GLD's ownership by institutions at 51.3% while SLV's is 19.6%. Deutsche Bank notes that "one-third of institutions holding bullion will probably keep it. We expect that the bulk of the drawdown comes from institutional investors rather than retail investors".

So GLD/gold holdings have dropped primarily due to institutional liquidations whereas SLV/silver holdings has held up because there are more individual "buy and hold" investors in SLV/silver.

My thesis is sort of supported by looking at Bullion Vault's numbers, as Bullion Vault is primarily a retail product (average account is $50k link). For gold over past four weeks they are only down 1.6%and for silver they are up 1.1%, which is very different to the general trend.

The investors in the Sprott funds are the strongest hands of all, with PHYS and PSLV showing zero change in ounces held (that is a joke, BTW).

PS - a couple of interesting facts from the Sharelynx numbers:

1. Both GLD and SLV have a "market share" of publically reported stocks of 39%

2. Ratio of silver oz to gold oz is almost exactly 10:1 (ie for every ounce of gold held, 10 ounces of silver are held)

3. Ratio of silver to gold by dollar value is 0.16:1 (ie for every dollar invested in gold, only 16 cents is invested in silver)