Demand for gold and oil ETCs continues to surge, says ETF Securities

The rise in flows came despite a decline in the gold price, indicating that some investors view the gold price in the USD900 per ounce range as a good long term entry point.

ETFS Physical Gold and Gold Bullion Securities now hold the equivalent of USD6.1bn of physical gold, the largest gold ETF/ETC holdings in Europe and the second largest in the world.

Oil ETCs also saw strong demand last week with flows into long oil ETCs rising by USD94m.

ETFS Brent 1yr saw USD48m of inflows on the back of a single USD43m transaction, the largest investment to date in a longer-dated oil ETC, highlighting the interest in ETCs across all maturities including longer dated oil.

Since the beginning of the year oil ETCs have seen USD898m of inflows and USD1.3bn since 1 November 2008, with ETFS Crude Oil, ETFS Brent, ETFS Leveraged Oil and ETFS WTI seeing the largest flows.

Flows into oil ETCs have surpassed even the USD1.2bn of flows into ETFS’ physically-backed gold ETCs since November, highlighting extremely bullish investor sentiment towards oil returns.

ETFS Short Crude Oil, which moves inversely to the oil price, has seen USD343m of outflows since peaking in August of last year, taking investors net long positions in oil ETCs to their highest level on record.

This is a dramatic reversal of the situation in May to August 2008 when investors had large net short oil ETC positions as oil prices peaked and fell precipitously.

After gold and oil, agriculture has seen the strongest investor interest with USD10m into ETFS Agriculture last week, bringing total flows this year to USD163m. Cumulative flows into agriculture ETCs are up 20 per cent since the beginning of the year and total AUM in the sector stands at USD698m.

In terms of AUM, ETFS Agriculture, ETFS Forward Agriculture, ETFS Wheat and ETFS Sugar hold the largest assets.