Gold Support From ETFs Gone: Pro

Large flows out of gold exchange traded funds are largely to blame for the decline in commodity prices, Queen Anne's Gate Capital CIO Kathleen Kelley said Monday.

"Gold doesn't really model well on a supply-demand basis, but those ETF flows are enormous. And as a percentage of mine supply in gold, they're up above 90 percent," she said. "In total supply, including recycling, they're lower than that, but it's still enormous supply that can come back to the market when people decide that they don't want to own gold anymore."

On CNBC's "Fast Money," Kelley said that one side of the supply-demand equation provided a tell.

"When you first start to look at the demand side of gold and particular of platinum and palladium, demand hasn't been that great," she said. "So what's really kept these up are the ETFs. Physical demand for jewelry has been weak. In the platinum market, auto catalyst demand from Europe has been week. So the demand side has been weak."

Kelley said that economic uncertainty in recent years has ebbed, reducing the allure of gold as a haven.

"When you think about the last four years when you've had these big inflows into ETFs, and people's view of the world, there was a lot of fear there, and people wanted to hold something that they thought wouldn't disintegrate, and so owning gold made sense at that point," she added.

"But when you look four years out from now, you don't have that same kind of fear. We've handled a lot of issues that are out there. And gold ETF doesn't yield you anything, so you want to look for some yield someplace. So I think that's why we're seeing this decline in all of these ETFs."

Trader disclosure: On April 15, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Jon Najarian is long VXX; Jon Najarian is long VIAB; Jon Najarian is long GVZ; Jon Najarian is long JCP CALLS; Jon Najarian is long TXN PUTS; Joe Terranova is long VRTS; Joe Terranova is long SJM; Joe Terranova is long AXP; Joe Terranova is long IBM; Joe Terranova is long SPLK; Joe Terranova is long PANW; Joe Terranova is long KORS; Joe Terranova is long GS; Joe Terranova is long BBG; Joe Terranova is long TUMI; Joe Terranova is long BK; Joe Terranova is long SWN; Joe Terranova is short mini S&P Futures; Stephanie Link is long AAPL; Stephanie Link is long GS; Stephanie Link is long CSCO; Stephanie Link is long FB; Mike Murphy is long AAPL.