Gold ETP Inflows Surge Most in Nine Weeks as Price Declines Attract Investors

while discussions continue on increasing Greek bonds write-downs to more realistic levels and recapitalizing European banks. Meanwhile, the G20 meeting of finance ministers over the weekend kept the pressure on European governments to have effective implementation plans ready for the October 23 summit in Brussels. In terms of data, the main focus this week will likely be on the German ZEW for further indications of growth momentum (or lack thereof) in the Eurozone core and key China industrial figures.

ETFS Physical Gold (PHAU) received the highest inflows in 9 weeks, totalling $153mn. Despite the generally positive market mood, precious metals were supported last week as recent price declines attracted investors, with total inflows into ETFS gold ETCs reaching $161mn. Rising inflationary pressure in the Euro-area, coupled with a weaker US Dollar and continued uncertainty over European crisis plans lent support to gold. ETFS Physical Silver (PHAG) and

ETFS Silver Trust (SIVA) have consistently seen inflows in recent weeks, highlighting their dual characteristics for investors, receiving $8mn and $6.5mn respectively last week.
All-time record outflows from ETFS Short Nickel (SNIK), as investors bet on a turnaround for industrial metals. ETFS Short Nickel (SNIK) outflows totalled $14.4mn last week. At the same time, ETFS Copper (COPA) and ETFS Short Copper (SCOP) saw $8.1mn inflows and $11.8mn outflows, respectively. Appetite for industrial metals was likely buoyed by speculation that the recent slump in industrial metal prices might prompt China, the world’s biggest copper consumer, to build stockpiles.

ETFS Leveraged Crude Oil (LOIL) saw the biggest outflows in seven months, since March 2011. LOIL outflows totalled over $20mn last week, as the discount of WTI benchmark crude to Brent widened to over $27 a barrel. With natural gas prices remaining at the low end of the recent $3.50-$4.50 per mm BTU range, ETFS Leveraged Natural Gas (LNGA) saw its 2nd consecutive week of inflows, totalling $16.5mn over the period.

ETFS Grains (AIGG) saw biggest inflows since January on the back of bullish crop production report. AIGG inflows totalled $5.7mn last week. The USDA October WASDE production report came across as generally bullish for corn, soybeans and wheat. At the same time, stock numbers were upwardly revised on weaker than forecast use and exports due to the slowdown in the global economy. Wheat production estimates were lowered, but ending stock estimates for the US were unexpectedly increased, as a result of weaker demand. Corn and soybean production forecasts were also lowered, adding to the bullish sentiment. ETFS Wheat (WEAT) also benefited, receiving the largest inflow in three months, totalling $4.3mn.