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Investors “more bullish on commodities outlook”

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Exchange traded commodity flows indicate that investors may be becoming more bullish on the outlook for commodities, says ETF Securities.

Exchange traded commodity flows indicate that investors may be becoming more bullish on the outlook for commodities, says ETF Securities.

It says flows into long ETCs net of short ETCs rose for the fourth consecutive week, increasing by USD375m over the period, a ten per cent rise in flows since hitting bottom on 7 November.

The main driver of the turnaround in flows has been a sharp rise in net long energy ETC positions.

Inflows into long energy ETCs last week rose at their fastest pace since the beginning of November, increasing by nearly USD70m.

Holdings of long energy ETCs net of short positions are currently at their highest level since short ETCs were listed on the LSE February 2008, highlighting investors’ increasingly bullish positioning on energy prices.

This follows sharply negative ETC positioning on energy from late May through August as investors built large positions in ETFS Short Crude Oil on anticipation of oil price declines.

The top five ETC inflows last week were in the energy sector with ETFS Crude Oil, ETFS Brent, ETFS WTI, ETFS Energy DJ-AIGCI, and ETFS Leveraged Crude Oil collectively accounting for 85 per cent of net inflows over the past week.

ETFS Crude Oil has seen the strongest inflows amongst ETFS energy products. Net inflows were USD26m last week, up 250 per cent over the past six weeks.

Precious metals had a relatively quiet week, though investors continued to build long positions in physical gold, with net purchases of ETFS Physical Gold up USD3.5m on the week. This follows USD140m in creations the previous week.

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