Defensive Positioning Sees Precious Metals Back in Vogue; Natural Gas Experiences Solid Demand as Investors Shun Oil …
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– Physical gold inflows hit a 13-week high, totalling $236mn. Seven out of the top ten largest inflows into ETFS’ commodity platform last week were into precious metals ETCs, with gold seeing the largest flows. The renewed interest in gold in particular indicates investors are again turning defensive about the economic outlook. Softer economic data continues to impact confidence about the sustainability of the global recovery, fuelling inflows into the precious metals sector. After already receiving news that the Japanese economy is barely growing, that the US Fed believes US growth remains at risk, and Greek and Irish issues bringing sovereign risk back into focus, defensive positioning appears to be on the rise.
– Risk aversion drives first ETFS Short Copper (SCOP) inflows in five weeks. Investors are looking to take advantage of the nervous market mood by taking positions in ETCs that may profit or remain more buffered from a turndown in the global economy. SCOP experienced its largest inflows in six weeks, totalling over $15mn. ETFS All Commodities (AIGC) experienced its fourth consecutive weekly inflow, with investors appearing to be moving into more diversified commodity holdings to reduce overall portfolio volatility.
– Further profit-taking from agriculture ETCs as grain prices consolidate recent gains. Last week, investors withdrew a further $27mn from ETFS Agriculture (AIGA) after concerns about grain supply eased as reports indicated that US supply could fill the void left by reduced production in the black Sea region.
– Strongest inflows into long natural gas ETCs in 24 weeks. Investors continued to added $64mn of news funds into natural gas ETCs last week. After gold, ETFS Leveraged natural gas (LNGA) received the largest inflows, totalling $48mn. At the same time, investors continued to pare long oil positions, as oil prices traded down toward middle of $65-80 per barrel range. Oil price declines came on the back of softening
Source: ETFWorld – ETFSecurities
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