Etikett: El Niño

Agricultural Commodities Rally

Agricultural Commodities RallyAgricultural Commodities Rally

Agricultural Commodities Rally – ETF Securities Commodity ETP Weekly

•    Inflows into long oil ETPs highest in 14 weeks, as investors return to bargain hunting.

•    Profit-taking led to US$36.0mn outflows from long wheat ETPs.

•    Long nickel ETPs see largest inflows since November 2014 on the back of bargain hunting.

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The ‘No’ campaign in the Greece’s referendum yesterday received more than 60% of votes, emboldening the Greek government’s stance to reject its creditors terms. Failure to make progress in debt negotiations elevates the risk of a default on the €3.5bn that is owed to the ECB on 20th July. A default on that bond would almost certainly lead to the emergency liquidity assistance (ELA) being switched off and throw Greek banks into an untenable position. Gold has surprisingly not reacted to the events but that could change as worst-case scenarios crystalize. Agricultural commodities have clearly been outperformers in the past week. As the strengthening El Niño weather pattern changes crop growing conditions, we believe agricultural commodities will continue to offer investors strong opportunities.

Inflows into long oil ETPs highest in 14 weeks, as investors return to bargain hunting. A rise in rig counts in the US, the first since December 2014, drove WTI crude oil prices down 4.8%. Brent fell by 1.8%. As we have long argued, the rally in oil prices since March has been premature and has the potential to delay the supply cuts the industry needs. The increase in oil rigs is a confirmation that that incentive to cut production has waned. The necessary price decline should see that production is indeed pared back over the coming months. The potential lifting of sanctions against Iran should also weigh on oil prices in the near term. While a July 1st nuclear deal deadline passed with no agreement, a new deadline of 7th July has been set and talks are continuing. We expect high cost conventional oil producers to suffer the greatest loss in market share when prices fall, setting the scene for the nimble US shale oil industry to rebuild in due course. ETF securities long oil ETPs received US$49.3mn of inflows last week.

Profit-taking led to US$36.0mn outflows from long wheat ETPs. Wheat rallied close to 18% in 4 days, before paring gains to 10.1% for the week. A USDA report confirmed that wheat acreage planted this year will be lower than last year. The market took this very positively, although gains were pared once it was acknowledged that planting intentions (survey of farmers in March) had actually called for deeper cuts to growing. The profit-taking led to the largest weekly outflows in wheat ETPs since their inception in 2006. We believe that the strengthening El Niño weather pattern threatens to reduce global wheat production this year and opens further opportunities for investors to go long. El Niño tends to make the Asian sub-continent around India and Australia more dry than usual, which would crimp supplies from the large producing countries. Although the monsoon in India had gotten off to a brisk start in June, last week rain had slowed to below normal levels, the typical hallmark of the El Niño suppressing the monsoon.

Long nickel ETPs see largest inflows since November 2014 on the back of bargain hunting. Nickel fell 3.9% last week to a six-year low, mainly driven by technicals after the nickel breached the $12,000 psychological threshold. We believe that fundamentals will reassert. Declining nickel pig iron production in China, stronger demand from the European stainless steel market and reduced nickel ore availability will be key catalysts. Long nickel ETPs saw US$8.8mn inflows.

Key events to watch this week. Investors will continue to be distracted by the events unfolding in Greece after the ‘No’ vote in the referendum yesterday. The Australian Bureau of Meteorology will provide an El Niño update tomorrow.

Video Presentation

Nitesh Shah, Research Analyst at ETF Securities provides an analysis of last week’s performance, flow and trading activity in commodity exchange traded products and a look at the week ahead.

For more information contact

ETF Securities Research team
ETF Securities (UK) Limited
T +44 (0) 207 448 4336
E info@etfsecurities.com

Important Information

General

This communication has been provided by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority.

This is a strictly privileged and confidential communication between ETFS UK and its selected client. This communication contains information addressed only to a specific individual and is not intended for distribution to, or use by, any person other than the named addressee. This communication (i) is provided for informational purposes only, (ii) should not be construed in any manner as any solicitation or offer to buy or sell any securities or any related financial instruments, and (iii) should not be construed in any manner as a public offer of any securities or any related financial instruments. If you are not the named addressee, you should not disseminate, distribute or copy this communication. Please notify the sender immediately if you have mistakenly received this communication. When being made within Italy, this communication is for the exclusive use of the ”qualified investors” and its circulation among the public is prohibited.

This document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of shares in the United States or any province or territory thereof. Neither this document nor any copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States.

This document may contain independent market commentary prepared by ETFS UK based on publicly available information. ETFS UK does not warrant or guarantee the accuracy or correctness of any information contained herein and any opinions related to product or market activity may change. Any third party data providers used to source the information in this communication make no warranties or representation of any kind relating to such data.

Any historical performance included in this document may be based on back testing. Back tested performance is purely hypothetical and is provided in this document solely for informational purposes. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance.

Historical performance is not an indication of or a guide to future performance.

The information contained in this communication is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision.

ETFS UK is required by the United Kingdom Financial Conduct Authority (”FCA”) to clarify that it is not acting for you in any way in relation to the investment or investment activity to which this communication relates. In particular, ETFS UK will not provide any investment services to you and or advise you on the merits of, or make any recommendation to you in relation to, the terms of any transaction. No representative of ETFS UK is authorised to behave in any way which would lead you to believe otherwise. ETFS UK is not, therefore, responsible for providing you with the protections afforded to its clients and you should seek your own independent legal, investment and tax or other advice as you see fit.

Risk Warnings

Any products referenced in this document are generally aimed at sophisticated, professional and institutional investors. Any decision to invest should be based on the information contained in the prospectus (and any supplements thereto) of the relevant product issue. The price of any securities may go up or down and an investor may not get back the amount invested. Securities may valued in currencies other than those in which there are priced and will be affected by exchange rate movements. Investments in the securities which provide a short and/or leveraged exposure are only suitable for sophisticated, professional and institutional investors who understand leveraged and compounded daily returns and are willing to magnify potential losses by comparison to investments which do not incorporate these strategies. Over periods of greater than one day, investments with a short and/or leveraged exposure do not necessarily provide investors with a return equivalent to a return from the unleveraged long or unleveraged short investments multiplied by the relevant leverage factor. Investors should refer to the section entitled ”Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in any securities referenced in this communication.

If you have any questions please contact ETFS UK at +44 20 7448 4330 or info@etfsecurities.com for more information.

Greece Teetering on the Brink of Default

Greece Teetering on the Brink of Default

ETFS Multi-Asset Weekly – Greece Teetering on the Brink of Default

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Highlights

•    Weather driving sharp movements in agricultural commodities.
•    Equity markets to price in default?
•    Haven demand and economic recovery fuelling US dollar higher.

A sharp re-pricing of risk is likely to follow Greece’s decision to hold the question of accepting its creditor terms to a referendum. Capital controls have been implemented to stem outflows from Greece’s banks while the ECB has frozen the Emergency Liquidity Assistance to Friday’s levels. Greece still owes the IMF €1.6bn tomorrow. Failure to pay could descend the country into chaos, marking the first sovereign default in the euro area since its creation. We believe that demand for defensive assets such as gold and the US dollar are likely to be key beneficiaries of the unfolding crisis.

Commodities

Weather driving sharp movements in agricultural commodities. Rain in the US delayed the harvesting of wheat and potential the sowing of soy, acting as a catalyst for price gains of 9.0% and 2.3% respectively. Meanwhile strong winds in Iowa and Illinois knocked over young corn stalks driving the price of corn up 5.2%. An acreage report from the USDA out tomorrow is likely to revise the estimates for planting of soy from what was expected to be a record high when the prospective planting survey was conducted in March. An intensifying El Niño weather pattern will likely see further disruption to crops this year. We believe that drier conditions in Australia, India and West Africa will drive wheat, sugar and cocoa prices higher. Better soy growing conditions in the US and South America that will result from an intensified El Niño will mitigate any lower planting intentions for soy, acting as a negative weight on price.

Equities

Equity markets to price in default? The continuing Greek debt saga led to choppy trading in Europe last week, with most bourses ending the week higher on optimism that some sort of deal would have been brokered over the weekend to avoid Greek defaulting on its IMF loan tomorrow. The referendum and capital controls now throw doubt as to whether a solution can be quickly found. European equity markets are faltering as a repricing of risk takes place. Meanwhile, the MSCI China A-Shares index has declined by closed to 20% in the past two weeks. While the Chinese domestic equity market has rallied more than 100% in the past year (even after the correction), the authorities are keen to the see that sentiment does not unravel. Over the weekend the People’s Bank of China cut interest rates by 25bps and lowered the reserve requirement ratio for small banks by 50bps.

Currencies

Haven demand and economic recovery fuelling US dollar higher. Greek financial woes drove the US dollar 2% higher against the Euro. The ongoing saga is likely to continue to favor the US dollar, as near-term solutions are likely to be met with more arduous negotiations. With the threat of an accident always around the corner, it is clear why haven currencies are sought after. While the Swiss franc has traditionally been treated as a haven currency, the Swiss National Bank has tried to lean against the wind with verbal intervention. After the SNB’s head declared its currency significantly overvalued, the currency declined 2.2% in the week against the US dollar. US non-farm payrolls due on Thursday and manufacturing ISM on Wednesday are two indicators that will be market will be looking at closely to assess whether the Fed is still on track to raise rates in September. Once the US starts to raise rates, we believe that increases will be gradual and highly data dependent. That could slow the pace of the current US dollar rally.

For more information contact:

ETF Securities Research team
ETF Securities (UK) Limited
T +44 (0) 207 448 4336
E  info@etfsecurities.com

Important Information

General

This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (”FCA”).

Investments may go up or down in value and you may lose some or all of the amount invested.  Past performance is not necessarily a guide to future performance. You should consult an independent investment adviser prior to making any investment in order to determine its suitability to your circumstances.

The information contained in this communication is for your general information only and is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision. Historical performance is not an indication of future performance and any investments may go down in value.

This communication may contain independent market commentary prepared by ETFS UK based on publicly available information. Although ETFS UK endeavours to ensure the accuracy of the content in this communication, ETFS UK does not warrant or guarantee its accuracy or correctness. Any third party data providers used to source the information in this communication make no warranties or representation of any kind relating to such data. Where ETFS UK has expressed its own opinions related to product or market activity, these views may change. Neither ETFS UK, nor any affiliate, nor any of their respective, officers, directors, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents.

ETFS UK is required by the FSA to clarify that it is not acting for you in any way in relation to the investment or investment activity to which this communication relates. In particular, ETFS UK will not provide any investment services to you and or advise you on the merits of, or make any recommendation to you in relation to, the terms of any transaction.  No representative of ETFS UK is authorised to behave in any way which would lead you to believe otherwise. ETFS UK is not, therefore, responsible for providing you with the protections afforded to its clients and you should seek your own independent legal, investment and tax or other advice as you see fit.

This document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of shares or securities in the United States or any province or territory thereof. Neither this document nor any copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States.

Other than as set out above, investors may contact ETFS UK at +44 (0)20 7448 4330 or at retail@etfsecurities.com to obtain copies of prospectuses and related regulatory documentation, including annual reports. Other than as separately indicated, this communication is being made on a ”private placement” basis and is intended solely for the professional / institutional recipient to which it is delivered.

Third Parties

Securities issued by each of the Issuers are direct, limited recourse obligations of the relevant Issuer alone and are not obligations of or guaranteed by any of UBS AG, Merrill Lynch Commodities Inc. (”MLCI”), Bank of America Corporation (”BAC) or any of their affiliates. UBS AG, MLCI and BAC, Shell Trading Switzerland, Shell Treasury, HSBC Bank USA N.A., JP Morgan Chase Bank, N.A., Deutsche Bank AG any of their affiliates or anyone else or any of their affiliates. Each of UBS AG, Merrill Lynch Commodities Inc. (”MLCI”), Bank of America Corporation (”BAC) or any of their affiliates. UBS AG, MLCI and BAC, Shell Trading Switzerland, Shell Treasury, HSBC Bank USA N.A., JP Morgan Chase Bank, N.A. and Deutsche Bank AG disclaims all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might have in respect of this document or its contents otherwise arising in connection herewith.

”Dow Jones,” ”UBS”, DJ-UBS CISM,”, ”DJ-UBS CI-F3SM,” and any related indices or sub-indices are service marks of Dow Jones Trademark Holdings LLC (”Dow Jones”), CME Group Index Services LLC (”CME Indexes”), UBS AG (”UBS”) or UBS Securities LLC (”UBS Securities”), as the case may be, and have been licensed for use by the Issuer. The securities issued by CSL although based on components of the Dow Jones UBS Commodity Index 3 month ForwardSM are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes, UBS, UBS Securities or any of their respective subsidiaries or affiliates, and none of Dow Jones, CME Indexes, UBS, UBS Securities, or any of their respective subsidiaries or affiliates, makes any representation regarding the advisability of investing in such product.

Investors Accessing Broad Commodity Exposures

Investors Accessing Broad Commodity Exposures

ETF Securities Commodity ETP Weekly Investors Accessing Broad Commodity Exposures

•    Agricultural commodity prices surge, attracting investors on supply concern.

•    Sugar inflows of US$15.3mn mark the largest inflows into any commodity over past month.

•    Optimism over global recovery drives outflows from gold.

•    Largest inflows into energy ETPs for 14 weeks, totaling US$10.5mn.

•    This Thursday, we are hosting the webinar: ”Sentiment vs Fundamentals, What Happens Next?” taking a look at what may happen when prices realign with fundamentals. Learn more and register

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Broad basket commodity ETPs received over 50% of total inflows. With bond and some equity benchmarks seeming stretched, investors appear to be increasingly looking at the relative value of the commodity market and gaining broad based exposure via ETPs that offer a diversified exposure to a number of sectors. Meanwhile, despite the prolonged negotiations attempting to stem a Greek debt default, investors appear to be anticipating an 11th hour deal. Investors are becoming more optimistic about economic conditions and appear to be gaining more cyclical exposures and reducing defensive assets and with China continuing to support its economy with fresh rate cuts, commodity prices are likely to be well supported.

Agricultural commodity prices surge, attracting investors on supply concern. Wheat led the agricultural sector gains, as excess rainfall in the US is expected to further delay to the winter crop harvest. Meanwhile, the International Grains Council has also released estimates indicating a deficit for the 2015/16 crop year for both wheat and corn. However, with significant stock levels for both commodities, material gains will depend on how growing conditions will affect the progress of this year’s crop.

Sugar inflows of US$15.3mn mark the largest inflows into any commodity over past month. Bargainhunters appear to be seeing the 6½ year low sugar prices as an attractive entry point amid a global sugar glut. While expectations abound for another year of surplus in 2015, the threat to sugar supply from the El Niño could curb supplies from India, the world’s second largest producer. Additionally, data released last week showed that some Brazilian production in the June 2015 remains significantly below the same period a year earlier.

Optimism over global recovery drives outflows from gold. Last week saw the largest outflows from gold in 14 weeks, totaling US$126.8mn. Investors are seeking more cyclical exposures, believing in the sustainability of the economic recovery. In contrast to gold, and hovering at multi-year lows, silver, in particular has experienced strong inflows in 2015, with a greater amount of its demand profile coming from industrial sources.

Largest inflows into energy ETPs for 14 weeks, totaling US$10.5mn. Inflows into broad basket energy ETPs reached a 5-week high, netting US$7.2mn. Long natural gas ETPs received the biggest single commodity flows, receiving US$5.4mn after the build in storage levels surprised the market on the downside. Recently a surge in demand from power generation has seen stocks decline, largely due to warmer weather in recent weeks.

Key events to watch this week. With the Greek crisis enflamed by the decision to hold a referendum on the reform and bailout conditions, the secondary focus for investors will be the CPI readings for the Eurozone and the nonfarm payrolls in the US to gauge the extent that the future of monetary policy path will be divergent. Commodity investors will again focus on the weekly oil and natural gas storage figures, while in the agricultural space, this week’s USDA crop conditions and acreage reports will be monitored for any potential threat to current supply expectations.

Video Presentation

Martin Arnold, Research Analyst at ETF Securities provides an analysis of last week’s performance, flow and trading activity in commodity exchange traded products and a look at the week ahead.

For more information contact

ETF Securities Research team
ETF Securities (UK) Limited
T +44 (0) 207 448 4336
E info@etfsecurities.com

Important Information

General

This communication has been provided by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority.

This is a strictly privileged and confidential communication between ETFS UK and its selected client. This communication contains information addressed only to a specific individual and is not intended for distribution to, or use by, any person other than the named addressee. This communication (i) is provided for informational purposes only, (ii) should not be construed in any manner as any solicitation or offer to buy or sell any securities or any related financial instruments, and (iii) should not be construed in any manner as a public offer of any securities or any related financial instruments. If you are not the named addressee, you should not disseminate, distribute or copy this communication. Please notify the sender immediately if you have mistakenly received this communication. When being made within Italy, this communication is for the exclusive use of the ”qualified investors” and its circulation among the public is prohibited.

This document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of shares in the United States or any province or territory thereof. Neither this document nor any copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States.

This document may contain independent market commentary prepared by ETFS UK based on publicly available information. ETFS UK does not warrant or guarantee the accuracy or correctness of any information contained herein and any opinions related to product or market activity may change. Any third party data providers used to source the information in this communication make no warranties or representation of any kind relating to such data.

Any historical performance included in this document may be based on back testing. Back tested performance is purely hypothetical and is provided in this document solely for informational purposes. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance.

Historical performance is not an indication of or a guide to future performance.

The information contained in this communication is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision.

ETFS UK is required by the United Kingdom Financial Conduct Authority (”FCA”) to clarify that it is not acting for you in any way in relation to the investment or investment activity to which this communication relates. In particular, ETFS UK will not provide any investment services to you and or advise you on the merits of, or make any recommendation to you in relation to, the terms of any transaction. No representative of ETFS UK is authorised to behave in any way which would lead you to believe otherwise. ETFS UK is not, therefore, responsible for providing you with the protections afforded to its clients and you should seek your own independent legal, investment and tax or other advice as you see fit.

Risk Warnings

Any products referenced in this document are generally aimed at sophisticated, professional and institutional investors. Any decision to invest should be based on the information contained in the prospectus (and any supplements thereto) of the relevant product issue. The price of any securities may go up or down and an investor may not get back the amount invested. Securities may valued in currencies other than those in which there are priced and will be affected by exchange rate movements. Investments in the securities which provide a short and/or leveraged exposure are only suitable for sophisticated, professional and institutional investors who understand leveraged and compounded daily returns and are willing to magnify potential losses by comparison to investments which do not incorporate these strategies. Over periods of greater than one day, investments with a short and/or leveraged exposure do not necessarily provide investors with a return equivalent to a return from the unleveraged long or unleveraged short investments multiplied by the relevant leverage factor. Investors should refer to the section entitled ”Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in any securities referenced in this communication.

If you have any questions please contact ETFS UK at +44 20 7448 4330 or info@etfsecurities.com for more information.

Is Volatility Here to Stay?

Is Volatility Here to Stay?

ETFS Multi-Asset Weekly – Is Volatility Here to Stay?

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Highlights

Precious metals stage comeback as Greek negotiations falter.
Rollercoaster ride continues for China A-shares.
Euro defies potential of Greek exit.

The ongoing ‘deal or no deal’ saga has kept most asset markets on edge, as rising uncertainty spooks investors. We expect that volatility will begin to stabilise once we have greater clarity on the scope of a bailout and the conditions attached. To that end, we do not expect a ‘Grexit’ and feel that the ECB will stem any potential run on the Greek banking system via the ELA. Notwithstanding a stronger USD, gold appears well placed to add to recent gains the longer the Greek negotiations are drawn out, with benchmark equities already rebounding as investors appear to expect a near-term resolution.

Commodities

Precious metals stage comeback as Greek negotiations falter. Precious metals began to show their mettle, responding to the prolonged standoff between Greek officials and the Troika last week. Gold and silver led the way, their value to investors as monetary metals coming to the fore. While these gains could be unwound in the near-term if an agreement is reached, we expect further modest gains in coming months as the ECB and other major central banks continue down the money printing path. Meanwhile, El Niño continues to be the question mark for agricultural markets, potentially threatening both wheat and sugar supplies in H2 2015. Cocoa gained a further 6 % last week, as a tighter supply from Ghana and El Niño fears continued to support the market. However, grind demand has also been somewhat weak and could threaten the price bullish sentiment.

Equities

Rollercoaster ride continues for China A-shares. After MSCI announced that it would continue to keep the China A shares inclusion under review, focus has again turned to the amount of unwanted leverage in Chinese stocks. A crackdown by regulators on unauthorized margin lending has been the latest setback for China A shares, sending them tumbling over 6% last week. Despite the volatility, we expect further gains in the medium term, with valuations in line with historical averages and significant market cap growth potential. Meanwhile, volatility was a feature for European bourses also as they rebounded, tracking US benchmarks higher, as the threat of a Greek exit fades.

Currencies

Euro defies potential of Greek exit. The market view on EUR/USD is becoming increasingly polarized, with some expecting gains in the face of rising volatility. We expect downside risks to come more into play and would feel any near-term rally as an opportunity to establish short positions. Optimism over a Greek deal is weighing on the Euro in early trading. The FOMC meeting last week was interpreted relatively dovishly by the market and began the decline for the US Dollar, and coupled with investment flows that supported the Euro, it was one-way traffic last week. However, as concern over the Greek sovereign situation begins to stabilise, investors are again likely to focus on the fundamentals and the relative strength of the US economy. Current market pricing is indicating further USD strength against most G10 currencies this week. GBP has also been buoyant and we expect this to continue with evidence of rising wages raising expectations of tighter policy from the Bank of England. Last week’s retail sales data also surprised to the upside, highlighting the health of household balance sheets.

For more information contact:

ETF Securities Research team
ETF Securities (UK) Limited
T +44 (0) 207 448 4336
E  info@etfsecurities.com

Important Information

General

This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (”FCA”).

Investments may go up or down in value and you may lose some or all of the amount invested.  Past performance is not necessarily a guide to future performance. You should consult an independent investment adviser prior to making any investment in order to determine its suitability to your circumstances.

The information contained in this communication is for your general information only and is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision. Historical performance is not an indication of future performance and any investments may go down in value.

This communication may contain independent market commentary prepared by ETFS UK based on publicly available information. Although ETFS UK endeavours to ensure the accuracy of the content in this communication, ETFS UK does not warrant or guarantee its accuracy or correctness. Any third party data providers used to source the information in this communication make no warranties or representation of any kind relating to such data. Where ETFS UK has expressed its own opinions related to product or market activity, these views may change. Neither ETFS UK, nor any affiliate, nor any of their respective, officers, directors, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents.

ETFS UK is required by the FSA to clarify that it is not acting for you in any way in relation to the investment or investment activity to which this communication relates. In particular, ETFS UK will not provide any investment services to you and or advise you on the merits of, or make any recommendation to you in relation to, the terms of any transaction.  No representative of ETFS UK is authorised to behave in any way which would lead you to believe otherwise. ETFS UK is not, therefore, responsible for providing you with the protections afforded to its clients and you should seek your own independent legal, investment and tax or other advice as you see fit.

This document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of shares or securities in the United States or any province or territory thereof. Neither this document nor any copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States.

Other than as set out above, investors may contact ETFS UK at +44 (0)20 7448 4330 or at retail@etfsecurities.com to obtain copies of prospectuses and related regulatory documentation, including annual reports. Other than as separately indicated, this communication is being made on a ”private placement” basis and is intended solely for the professional / institutional recipient to which it is delivered.

Third Parties

Securities issued by each of the Issuers are direct, limited recourse obligations of the relevant Issuer alone and are not obligations of or guaranteed by any of UBS AG, Merrill Lynch Commodities Inc. (”MLCI”), Bank of America Corporation (”BAC) or any of their affiliates. UBS AG, MLCI and BAC, Shell Trading Switzerland, Shell Treasury, HSBC Bank USA N.A., JP Morgan Chase Bank, N.A., Deutsche Bank AG any of their affiliates or anyone else or any of their affiliates. Each of UBS AG, Merrill Lynch Commodities Inc. (”MLCI”), Bank of America Corporation (”BAC) or any of their affiliates. UBS AG, MLCI and BAC, Shell Trading Switzerland, Shell Treasury, HSBC Bank USA N.A., JP Morgan Chase Bank, N.A. and Deutsche Bank AG disclaims all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might have in respect of this document or its contents otherwise arising in connection herewith.

”Dow Jones,” ”UBS”, DJ-UBS CISM,”, ”DJ-UBS CI-F3SM,” and any related indices or sub-indices are service marks of Dow Jones Trademark Holdings LLC (”Dow Jones”), CME Group Index Services LLC (”CME Indexes”), UBS AG (”UBS”) or UBS Securities LLC (”UBS Securities”), as the case may be, and have been licensed for use by the Issuer. The securities issued by CSL although based on components of the Dow Jones UBS Commodity Index 3 month ForwardSM are not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes, UBS, UBS Securities or any of their respective subsidiaries or affiliates, and none of Dow Jones, CME Indexes, UBS, UBS Securities, or any of their respective subsidiaries or affiliates, makes any representation regarding the advisability of investing in such product.

Gold in Focus as Swiss Gold Referendum Looms

Gold in Focus as Swiss Gold Referendum Looms

ETFS Multi-Asset Weekly Gold in Focus as Swiss Gold Referendum Looms

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Highlights

Natural gas surges on colder weather.

Swiss gold referendum key for CHF strength.

Gold miners rally as gold rebounds.

Cyclical assets broadly performed well last week as central banks reiterated economic support. But so did gold and it could continue, despite the strength in the US dollar, in a sign that its price has bottomed after weeks of de-rating, as the Swiss gold referendum looms. Sentiment was buoyed last week with the European Central Bank pledging once again “to do whatever it takes” to ward off deflation. The ECB commenced purchases of asset-backed securities, expanding its QE programme, while the People’s Bank of China cut interest rates to spur flagging demand.

Commodities

Natural gas surges on colder weather. Natural gas rebounded 13.7% as a cold snap ate into gas storage levels. Natural gas transportation is highly constrained during times of peak demand in New York and New England and last week’s cold weather led to a strong rally in the US North East region in particular. Gold and silver gained 2.4% and 2.9% last week, respectively. With both metals having fallen close to their marginal cost of production, it is increasingly likely that production will be cut, helping to tighten the supply of the metals. Soybeans and corn fell 3.2% each as the rising probability of an El Niño weather event bodes well for growing conditions for the crops in South America over the coming months. The Australian Bureau of Meteorology increased the odd of an El Niño to 70% from 50% previously. Nickel bounced up 6.2% as Indonesia reaffirmed its ore export ban.

Equities

Gold miners rally as gold rebounds. DAXglobal® Gold Miners Index continued its recovery from record lows this week, rallying 8.9%, tracking the performance of bullion, albeit in a more volatile manner. Miners initially outperformed gold this year, but in recent months gains have been erased following the tumble in the spot price of gold to the 1,200 $/oz level, slashing the profit margins for high cost producers. Meanwhile, in Europe stocks advanced after Mario Draghi’s dovish comments surrounding the ECB’s asset purchase program which suggested measures will extend to sovereign bond buying if inflation continues to remain depressed and well below the medium term target of below but near to 2%.The DAX 30 and FTSE MIB rose 2.55% and 2.27% respectively, as investors anticipate stimulus measures to be extended.

Currencies

Swiss gold referendum key for CHF strength. We expect the Swiss franc to lift and test the SNB commitment to maintaining its currency policy floor against the Euro if the ‘Save Our Swiss Gold’ referendum is passed. A ‘yes’ vote for the referendum would mean that the CHF would have a stronger gold backing, in turn increasing its attractiveness for investors looking for hard asset exposure in an uncertain period for European economies. While recent polls have indicated that an affirmative response from voters is waning, as the central back campaign against the proposition, a large proportion undecided voters will be the likely key for victory for either side. Nevertheless, the market does not appear to have priced in the chance of the referendum being passed and we expect the risks for the Swiss Franc (and gold) are skewed to the upside.

For more information contact:

ETF Securities Research team
ETF Securities (UK) Limited
T +44 (0) 207 448 4336
E  info@etfsecurities.com

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