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Physically-backed gold ETCs record the biggest inflow in three months


Physically-backed gold ETCs recorded the biggest inflow in three months, totalling USD95m, as investors see the recent price decline as a buying opportunity, according to ETF Securities’ weekly Commodity ETP review.

Gold traded at around USD1,700oz last week, after the premium attached to the gold price on expectations that the US will implement QE3 has been cut back on continued strong US economic data. The increased correlation between gold and the Euro/Dollar exchange rate is holding gold from rising further at the moment, despite the on- going sovereign concerns in the Eurozone.

Last week was characterised by choppy trading in the silver market, with ETFS Short Silver (SSIL) and ETFS Leveraged Silver (LSIL) both receiving inflows of USD9m and USD8m respectively, as sentiment wavered on mixed news. US listed ETFS Platinum Trust (PPLT) saw outflows of USD16m last week, on the resumption of production at Implats’ mine and lower than expected auto-sales in China. At the same time, palladium ETCs recorded inflows of over US$9m, on expectations that the recent spike in oil prices may boost demand for diesel engine catalysts over those for gasoline, favouring palladium over platinum.

Oil ETPs saw the sixth consecutive week of strong inflows on escalation of the Middle-East tensions. ETFS Brent 1 mth (OILB) and ETFS WTI Crude Oil (CRUD) recorded another week of strong demand with inflows of up to USD11m and USD17m respectively, as fears of an Israeli attack in Iran rise as Iran continues to flout IAEA inspection requests. ETFS Leveraged Natural Gas (LNGA) saw another week of inflows as prices near 10-year lows appeared to attract investors.

ETFS Short Copper (SCOP) saw the biggest inflow in a month prompted by higher than expected stockpiles in China. Shanghai Futures Exchange inventories hit their highest level since 2003, raising fears of a potential slowdown in China demand. YTD, however, long copper positions continue to dominate shorts, indicating that most investors are maintaining a bullish view.

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