Do Retail Investors Drive Silver and Gold Prices with SLV and GLD?

I have suffered through several articles and listened to quite a few accomplished traders hypothesize (almost blindly) how retail investors were driving the price of silver and gold through SLV and GLD. They say "if you look at the flows in these etfs, you would see that retail investors were driving up the price of gold and silver." Flat out ridiculous, I could logically disprove this naive theory in a sentence or two, but first let us have some fun.


Part 1. Let us first take into account that GLD and SLV are only the most popular of the precious metals etfs. There are over 20 other gold etfs, at least 5 electronically traded notes (just in the US). There are 13 silver etfs not including SLV and a few etns like ETRACS CMCI Silver Total Return and Societe Generale Effekten Gmbh. All of these instruments on top of the attention grabbing, contemporary Sprott Physical Silver Trust (PSLV) and the Sprott Physical Gold Trust (PHYS). So I feel it is important to keep in mind GLD and SLV are but a part of a greater synthetic precious metals markets.

Part 2. Since the claims and and hypotheses state that retail investors were driving the price of gold and silver through GLD and SLV, let us look at the institutional ownership. GLD's institutional ownership is currently 42.7%. To put this figure in perspective, I will take the example of Exxon Mobile (XOM) which currently has an institutional ownership of 49.6%. It would not be a surprise for GLD to have a greater percentage of institutional ownership than XOM. The last time I looked up this figure for GLD it was around 50%. Is Exxon mobile largely referred to as a retail driven stock, no it is not, it is a giant $370 billion oil company.

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