Rising Tide of Positive Sentiment Lifts All Commodity Boats

for banks to recapitalise. However, the flesh needs to be put on the bones of the plan, with successful implementation critical. Central bank activity this week (both the Fed and the ECB meet) will be critical to sustain the positive outlook. Implementation delays by politicians will not be tolerated by the market and risk appetite may evaporate quickly amidst continuing evidence of weakening economic activity in the Eurozone. The divergence between growth in the Eurozone and the US is widening, after the US economy surpassed pre-recession levels last week. Further proof of the trend will be closely scrutinised and US jobs and manufacturing numbers this week will be important indicators.

ETFS All Commodities (AIGC) receives first inflows in five weeks, totalling $5.5mn. Renewed risk appetite saw a turnaround in appetite for commodity investing, with investor inflows snapping a four-week streak of outflows for broad diversified commodity exposures.

Gold’s renewed appeal sees net inflows of $36mn last week. Physically-backed gold ETCs received the largest inflows on the commodity platform last week. After gold hit its lowest levels in around 3-weeks, bargain hunters took the opportunity to accumulate positions. Meanwhile, ETFS Silver (SILV) received the largest inflows in 20 weeks, totalling $5.6mn last week.

Largest inflows into industrial metals ETCs in eight weeks, totalling $14.5mn. Renewed optimism about a resolution to the Eurozone debt crisis lifted the industrial metal complex, assisted by the weaker USD. Inflows into long industrial positions outnumbered inflows into short positions by over six times. While ETFS Copper (COPA) received inflows of $6.2mn last week, inflows into ETFS Short Copper (SCOP) totalled $3.5mn, snapping five weeks of net outflows,
as profit-taking ensued after a double digit price rise.

Bearish oil investors fuel largest inflows into ETFS Short Oil (SOIL) in 20 months. A surge in oil prices last week prompted profit-taking, with inflows into SOIL totalling over $17mn last week. The weaker USD and more positive economic sentiment saw divestment of long oil ETC positions, which were again dominated by ETFS Leveraged Oil (LOIL) and ETFS Crude Oil (CRUD, with outflows of $12.5mn and $12.3mn respectively. Meanwhile ETFS Leveraged
Natural Gas (LNGA) experienced its 4nd consecutive week of inflows, totalling over $30mn over the period. With natural gas prices remaining subdued, investors appear to be positioning for a winter weather driven lift in prices.

ETFS Short Sugar (SSUG) records outflows of over $10mn last week. Expectations of stronger demand from China and concern over crop damage from Thai floods buoyed sugar prices last week.