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Gold ETPs See Surge of Inflows for Third Consecutive Week as Sovereign Risk Rattles Markets

Political instability in Greece and continued European jousting over a new financial package to get Greece through its next debt payments has caused investors to de-risk and move into perceived safe-havens.  ETP flows indicate rising demand for precious metals, particularly physically-backed gold ETCs. Other opportunistic investors are positioning portfolios to take advantage of shorterterm supportive fundamental conditions in agriculture and livestock sectors.  … 

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            Physically-backed gold ETCs see $40mn of inflows.  The political wrangling over the funding of a Greek bailout program is pushing Greece closer to the brink of a potential sovereign default, causing investors to look for alternatives to the Euro and risk assets. Physically-backed silver ETC also saw new inflows, the fifth consecutive week, with Leveraged Silver (LSIL) seeing the second largest weekly inflows on record of $13.2mn.
            Record inflows into ETFS Leveraged Wheat (LWEA) as investors appear to take advantage of price decline to gain exposure to anticipated stockpile draw-downs. The price premium for poor growing/weather conditions appears to have been stripped out of the market, but with further potential inventory declines expected going forward, the situation has the potential to change quickly. LWEA saw record net inflows of $14.7mn last week.

            Record inflows into ETFS Live Cattle (CATL), totalling $15.2mn. Expected reductions in young cattle numbers saw prices for live cattle jump last week, as investors looked to take advantage of tighter beef supplies at the end of the year.
            Industrial metals see first weekly net outflows in 5 weeks. Continued softness in developed world economic activity and expected further tightening of Chinese monetary policy following ongoing inflation concerns has seen some investors  reduce exposures to industrial metals markets. While ETFS Physical Copper (PHCU) led the outflows, with $9.7mn last week, ETFS Copper (COPA) received net inflows of $4mn last week. The rotation within the complex also appears to be continuing with ETFS Forward Industrial Metals (FIND) receiving $4.5mn in net inflows last week,as ETFS Industrial Metals (AIGI) saw $4.8mn in net outflows.  

            Source: ETFWorld – ETF Securities Commodity ETP Weekly


            – Valuesabove100% indicatean above average turnover compared to either the prior 30 trading days or the prior 260 trading days.

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