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determined to resolve the current crisis and financial markets stabilised after approval by both German and Finnish policymakers to raise EFSF funding. However investors remain wary with indicators of Eurozone confidence slipping to multi-year lows. Gold ETP flows benefited from lower prices and continued high investor uncertainty. Central bank meetings will be the focus of market attention this week. Investors will be listening for news of potential new stimulus measures, with the ECB, Bank of England and Bank of Japan holding policy meetings. Friday’s US nonfarm payrolls will be a critical indicator of the health of the world’s largest economy.
ETFS Gold ETP inflows rise by most in seven-weeks, increasing by $70mn, as lower prices and continued economic uncertainty prompted investors to accumulate positions. Gold’s perceived safe-haven qualities attracted investors, while other physically-backed precious metals ETCs experienced outflows.
Although physically-backed platinum and palladium ETCs have recorded consistent outflows in recent weeks, relative value investors have driven a surge of $29.5mn into ETFS Leveraged Silver (LSIL), responding to the gold:silver ratio hitting the highest level in 11 months.
Investors cut short industrial metals positions by over $25mn, the largest amount in 16 months. ETFS Short Copper (SCOP) led the way with outflows totalling over $25mn, as investors became less pessimistic about the potential for further declines in risk assets. Meanwhile ETFS Leveraged Copper (LCOP) benefited from the increase in risk appetite late last week with inflows totalling over $4mn, the highest in 29 weeks. Copper has dropped over 20% over the past month and opportunistic investors appear to be bargain hunting in the industrial metals sector, believing policymakers are now aware of the threat posed by a disorderly default within the Eurozone and are more committed to resolving the underlying structural problems.
Profit-taking prompts largest outflows from ETFS Agriculture (AIGA) in seven weeks. AIGA saw net outflows of $127mn last week as agricultural sector prices also weakened as a knee-jerk reaction to the decline in risk appetite. Investors appeared to be ignoring the relatively bullish supply backdrop for many agricultural commodities ahead of the latest USDA grains report, which turned out to be significantly more bearish than expected.
Inflows into oil ETCs but outflows from natural gas ETCs. Inflows into ETFS Leveraged Oil (LOIL) totalled $8.2mn, the largest in seven weeks. At the same time ETFS Natural Gas saw the 4th consecutive week of outflows of $15mn.
Source: ETFWorld – ETF Securities
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