Etikett: Nitesh Shah

Central Banks to Continue to Drive Sentiment

Central Banks to Continue to Drive Sentiment

ETF Securities Commodity ETP Weekly Central Banks to Continue to Drive Sentiment

WTI ETP investors become more polarised.

ETFS Platinum Trust (PPLT) sees US$11.5mn  of inflows while ETFS Palladium  Trust (PALL) sees US$11.8mn of outflows.

Coffee ETPs attract US$5.3mn in a volatile week of trading.

US$24.6mn of redemptions from ETFS Copper (COPA) followed China’s lowering of target growth.

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A better-than-expected labour market reading in the US released late last week should set the tone for cyclical optimism this week. However, the initial impact was a sell-off in gold and some cyclical assets as the market took the strong numbers as cue for the hawks at the Fed to start raising rates sooner than previously expected. With the ECB commencing its quantitative easing programme this week and further policy easing expected from a number of other countries, we believe that cyclical commodities will be able to shake off the recent bout of pessimism.

WTI ETP investors become more polarised. While inflows into long WTI continued for the 23rd week in a row, we saw a pick-up in flows into short WTI ETPs. Flows into the long products amounted to US$17.1mn (a three-week low) while flows into the short products amounted to US$9.1mn (a three-week high). A 5.4% gain in WTI led the longs to be victorious this week. US crude inventories continue to rise despite rigs being shut off. The glut in supply could continue for longer than many initially expected, driving the demand for WTI shorts. Additionally with the WTI futures curve in contango, investors in the short products will benefit from positive roll yield. Long Brent ETPs inflows of US$5.9mn reached the lowest level in four weeks.

ETFS Platinum Trust (PPLT) sees US$11.5mn of inflows while ETFS Palladium Trust (PALL) sees US$11.8mn of outflows. US investors appear to be switching between from palladium to platinum as its price is at historically attractive levels. The ratio of platinum to palladium price has fallen to 1.7 down from over 5.5 in 2009. While palladium has risen 6.4% in the past year, platinum has fallen 19.9%. As supply of the both metals tighten this year with a number of South African mines cutting back on production, platinum has the potential to make catch-up gains. Anglo American Platinum Ltd last Monday confirmed its plans to divest its Union and Rustenburg mines by selling or listing them as stand-alone companies.

Coffee ETPs attract US$5.3mn in a volatile week of trading. Coffee fell 6.6% on Tuesday and then rose 6.2% on Wednesday in a particularly volatile week. Continued rain in Brazil, the key producer of Arabica coffee, and increasing production in Colombia drove the price weakness. However the sharp rebound on Wednesday came amidst an interest rate hike by the Brazilian central bank. Prior Brazilian Real weakness contributed to stock off-loading by Brazilian coffee farmers. The Real appreciation that followed the rate rise could help tighten supply. The drastic decline in coffee prices in the past month appears overdone given the damage to coffee bushes had largely taken place in 2014 and the recent rain can do little to reverse that.

US$24.6mn of redemptions from ETFS Copper (COPA) followed China’s lowering of target growth. With China consuming approximately 40% of total global copper supply, its new growth target of around 7% from around 7.5% last year, has been seen to hurt demand for copper. However, we believe tightening supply will mitigate that potential loss of demand.

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.

Price-Dips Attract Commodity Inflows

Price-Dips Attract Commodity Inflows

Commodity ETP Weekly Price-Dips Attract Commodity Inflows

ETFS Platinum (PHPT) received its highest weekly inflow since November 2014.
ETFS Sugar (SUGA) sees its highest ever inflow.
Long oil ETPs continue to see inflows.
ETFS Corn (CORN) sees highest inflows since February 2014.
ETFS Physical Gold (PHAU) saw the highest outflows since June 2014.

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The Federal Reserve Open Market Committee sent a mixed message, acknowledging the softness in prices while pointing to strength in economic expansion and jobs. US Dollar appreciated, focusing on the implications of economic strengthening on the likelihood of a rate rise. Most US Dollar priced commodities fell. The optimism in economic activity may sit at odds with the slightly disappointing GDP figures released later last week and this week’s jobs numbers could drive a reversal in Dollar strength (and hence commodity price weakness) if they prove to be disappointing.

ETFS Platinum (PHPT) received its highest weekly inflow since November 2014. US$32.8mn flowed into PHPT last week. Platinum had rallied 6.6% since the beginning of the year before last week’s 3.6% correction trimmed the gains down to 2.2%. Investors appear to be buying into price dips. Global car sales have continued to rise, supporting demand for the metal that is used in autocatalysts.

ETFS Sugar (SUGA) sees its highest ever inflow. In a week of plummeting prices, SUGA saw US$42.9mn of inflows, more than double the next highest weekly inflow into the product in 2008. Sugar prices fell on the back of rain in Brazil providing relief to stressed land. Brazil is the world’s largest producer of raw sugar. India, the second largest producer, is currently deciding on how much export subsidies to award its cash-strapped sugar industry. Some of the recent volatility in prices has been driven by speculation on the size of this subsidy.

Long oil ETPs continue to see inflows. WTI and Brent ETPs have respectively seen 18 and 7 consecutive weeks of inflows. Despite price declines over most of that period, investors appear convinced that prices will increase. We believe that supply will tighten as loss-making non-OPEC oil rigs are progressively switched off. Last week a 7% fall in rig counts in the US drove a late-week price rally. OPEC will also likely cut production in the second half of the year once the rest of the world has demonstrated their willingness to pull back.

ETFS Corn (CORN) sees highest inflows since February 2014. Bargain-hunting drove US11.0mn of inflows into CORN. Corn price fell 3.2% last week, 10.0% over the past month. With bumper production last year, many expect reduced planting this year to help stabilise the market.

ETFS Physical Gold (PHAU) saw the highest outflows since June 2014. Reversing part of the US$163.8mn inflows from the previous week, US$108.5mn of outflows last week tracked the 2.1% decline in gold price. While there was no immediate fallout from the change in Greek government, the risk of surprises in the bail-out renegotiation process could drive haven demand for gold higher in coming months.

Key events to watch this week. After last week’s disappointing US Q4 GDP figures, the market will focus on the US jobs market data this week for signs of further economic stress. A weak payrolls reading will be seen as a cue for the Federal Reserve to delay rate rises that are expected in September this year. The market is currently looking for 233,000 new jobs added in January. The Bank of England and Reserve Bank of Australia are due to have their respective policy rate meetings this week. While no rate changes are expected, commodity price weakness could tip the balance for the RBA as it had done for the Bank of Canadian two weeks ago.

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.

A Four-Year High in Oil ETP Inflows

A Four-Year High in Oil ETP Inflows

Commodity ETP Weekly A Four-Year High in Oil ETP Inflows

Weekly oil ETP inflows highest in four years – US$76.9mn.

Natural gas ETPs saw US$7.5mn of inflows last week.

ETFS Physical Silver (PHAG) received highest inflows in nine weeks.

ETFS Aluminium (ALUM) sees outflows of US$41.3mn, the most in five weeks.

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Continued oil price declines drove further rounds of bargain hunting last week, with WTI and Brent oil ETPs seeing their highest weekly inflows since 2011. WTI fell to US$48/bbl and Brent came within a whisker of US$50/bbl, putting their price at more than 5-year lows. We believe that oil prices at these levels are unsustainable. Although OPEC resisted calls to cut production in November, highlighting the need for oil prices to find a new equilibrium, we believe the cartel will eventually have to reduce supply to help stabilise global oil prices. The cartel jointly produces approximately 40% of global oil output. Saudi Arabia, the largest producer in the cartel, raised its sale price of Arab Light grade oil in Asia for February last week, implicitly acknowledging that the price-war has gone too far. Demand for cyclical commodities, including oil, could rise this year as economic growth continues to improve. US non-farm payrolls released on Friday displayed an upside surprise once again, providing a boon to cyclicals.

Weekly oil ETP inflows highest in four years. Long Brent oil ETPs received US$76.9mn of inflows last week, the highest since March 2011, while Long WTI oil ETPs gained US$81.6mn of inflows, the highest since June 2011. Bargain hunting is clearly continuing to drive the flows in a week where Brent fell 11.1% and WTI dropped 8.4%. WTI investors in particular do not appear to be deterred by the falling prices with 15 continuous weeks of inflows having been recorded (during which time WTI has fallen a cumulative 45%). Brent oil ETPs have seen four consecutive weeks of inflows, also indicating that many investors think that global oil prices are nearing a bottom. US oil rigs have already started to decline and are 10% below September level. Historically, oil rigs have taken about 16 weeks to adjust to lower oil prices. During periods of strong declines in WTI crude price, like during the 2008 crisis, oil rigs have halved in the following four months and we expect a similar pattern to occur in 2015. Tightening of oil supply in the US and other oil producing countries could be a precursor to the OPEC cartel cutting supply come its June 2015 meeting.

Natural gas ETPs saw US$7.5mn of inflows last week, marking the seventh consecutive week of inflows. A cold snap drove the price of natural gas 1.3% higher last week. Gas storage inventories also fell more than expected, supporting prices. Most of the flows came into ETFS Leveraged Natural Gas (US$5.1mn), indicating a short-term tactical play on the weather issues that are driving the price.

ETFS Physical Silver (PHAG) received highest inflows in nine weeks. Flows into PHAG amounted to US$17.3mn. Silver prices rebounded 2.5% last week to the highest level since mid-December 2014 as geopolitical risks once again drove the price of the defensive precious metals like gold and silver. With terrorist attacks in France and questions surrounding the future of Greece in the euro area, geopolitical concerns have once again come to the fore. The positive employment numbers from the US released on Friday failed to cap the gains in both gold and silver last week.

ETFS Aluminium (ALUM) sees outflows of US$41.3mn, the most in five weeks. After a 12% rally between October and November 2014, aluminium prices have been falling. Excess production capacity, especially in China continues to weigh on aluminium prices. While we believe that capacity will be eventually be cut, the process will take some time.

Key events to watch this week. Chinese lending and exports data will be closely watched as investors assess the strength of demand from the world’s largest consumer of commodities. US inflation data could give an indication of the urgency or lack thereof for interest rate hikes. Consensus expectations of a fall in headline inflation are likely to keep calls for quicker rate rises at bay.

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.

Bargain Hunting Drives Demand for Energy ETPs

Bargain Hunting Drives Demand for Energy ETPs

Commodity ETP Weekly  Bargain Hunting Drives Demand for Energy ETPs

Long WTI ETPs see highest fortnightly inflows since 2012.

ETFS Leveraged Natural Gas attracted a further US$10.7mn.

A 3.4% spike in silver prices prompted US$11.4mn of profit taking from ETFS Daily Leveraged Silver (LSIL).

ETFS Agriculture (AIGA) sees outflows on profit-taking.

 

Download the complete report (.pdf)

 

Oil and natural gas continue to see the highest inflows in the commodity complex as investors view current prices as increasingly attractive. WTI and Brent oil respectively fell a further 10.3% and 8.6% this week as both the IEA and OPEC cut demand forecasts for 2015 to the lowest level since 2002. However, underlying the cut to OPEC demand was an increase in non-OPEC oil supply, conceding some loss in market share. Many ETP investors believe that such low prices are unsustainable and this cut in demand forecasts is likely to be followed by a tightening in OPEC supply in 2015.

Long WTI ETPs see highest fortnightly inflows since 2012. Long WTI ETPs saw a further US$33.2mn of inflows last week on top of the US$45.7mn the week before. That contrasts the continued outflows from long Brent ETPs which saw a further US$0.5mn of outflows last week. WTI has fallen below US$60/bbl and Brent is trailing not far behind. At these prices, close to 20% of crude oil and condensates production from the United States are unprofitable according to the EIA. If prices remain persistently low, production will likely be reduced by higher cost producers. Although price weakness is likely to continue through the first half of 2015, continued economic growth in the US and China, combined with a reduction in oil supply, will eventually bring the oil market back to balance, with prices returning to trade around the US$90/bbl level towards the end of 2015. We believe the reduced demand forecasts from OPEC are a precursor to supply cuts.

ETFS Leveraged Natural Gas attracted a further US$10.7mn on top of the US$27.8mn the week before. With a larger-than-expected storage withdrawal confirmed on Wednesday, natural gas prices staged a small recovery mid-week, but closed down on the week as a whole. Despite the relatively warm US winter expected by NOAA, ETP investors believe that current prices remain very low for the peak heating season and given the unpredictability of weather, the risks remain to the upside for demand and price.

A 3.4% spike in silver prices prompted US$11.4mn of profit taking from ETFS Daily Leveraged Silver (LSIL). Marking the highest outflows from the leveraged silver product since 2011, investors took the opportunity to lock in profits before the year’s end. Over 50% of silver demand comes from industrial applications, with China and the US accounting for over 40% of global fabrication demand. Continued growth in these large economies in 2015 should see demand for silver increase, helping support prices.

ETFS Agriculture (AIGA) sees outflows on profit-taking. Despite the marginally bearish WASDE report out on Wednesday, wheat, corn and soy prices increased as rumours of Russian exports restrictions rattled the market. While not confirmed, prices were up strongly on Thursday only to ease on Friday as decent snow coverage in the US will help the 2015 wheat crop after a record 2014. ETP investors took profit to square their positions before the end of year.

Key events to watch this week. The Federal Open Market Committee’s last meeting for 2014 will be closely watched for cues on policy tightening to come in 2015. US CPI inflation data out on the same day as the central bank’s meeting, should attract attention as investors gauge the capacity for the Fed to maintain loose policy for longer. Gold prices are closely linked to the US interest rate path and indications of tighter policy could hurt precious metals. Consensus expectations are for HSBC’s Chinese PMIs to fall below the 50 mark, indicating a contraction in industrial activity from last month. Should they remain above 50, we could see renewed optimism in the Chinese growth outlook and their subsequent demand for commodities.

 

 

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.

Gold Back in Favour

Gold Back in Favour

Gold Back in Favour

Highlights

 

Physical gold ETPs inflows hit 9-month highs.

Long WTI oil ETPs see eighth consecutive week of inflows, totalling US$10.8mn.

Silver ETPs experience third consecutive week of inflows.

ETFS Copper (COPA) received highest inflows since August.

Profit-taking prompts withdrawals of US$6.6mn in ETFS Leveraged Natural Gas (LNGA)

ETFS Soybeans (SOYB) sees largest outflow since April 2013 as El Niño probability increases.

 

Download the complete report (.pdf)

 

Gold inflows rose to their highest since February 2013 last week following a 2.4% gain in price. With gold having fallen close to its marginal cost of production (which we estimate at US$1100/oz), investors increasingly believe that mine production will be cut in 2015, helping to tighten supply. At the end of this week the Swiss population will vote on whether to require their central bank to hold 20% of its assets in gold. While opinion polls only show 38% of the population is in favour of the proposal, there is a risk there will be more support on the day. If the proposal does pass, we would expect a sharp rally in gold.

Physical gold ETPs inflows hit 9-month highs. Inflows into physical gold ETPs reached the highest level since early February, totalling US$131.8mn last week, on a combination of bargain hunting and potential for a ‘yes’ result at the Swiss gold referendum. We believe that the Swiss referendum could act as a catalyst for further interest in the metal as the risk of a sharp rally increases.

Long WTI oil ETPs see eighth consecutive week of inflows, totalling US$10.8mn. The OPEC meeting this week will be a pivotal moment in regaining control in a cartel that appears to have lost its way. Discount oil selling by Saudi Arabia, Iran and Iraq in Asia and the US cannot persist if the cartel is to maintain credibility and we don’t believe the institution that has survived since 1960 will choose to become irrelevant right now. We believe Saudi Arabia will have to cut production in order to soothe the increasing restlessness of the other OPEC members. We remain believe both WTI and Brent benchmarks will increase as supply tightens in 2015.

Silver ETPs experience third consecutive week of inflows. Although silver rallied alongside gold last week, the gold to silver ration still remains at its highest since 2009, indicating that silver remains considerably cheap relative to gold. Continued global growth in 2015 should bode well for industrial silver demand, with Chinese photovoltaic consumption expected to be an area of strong growth in coming years.

ETFS Copper (COPA) received highest inflows since August. Although the copper price has fallen 8.7% year to date, optimism for the metal is growing. Supply surplus forecasts are slowing transforming to supply deficits and demand for industrial metals in general is likely to gain traction as China’s stimulus policy starts to have its desired effect.

Profit-taking prompts withdrawals of US$6.6mn in ETFS Leveraged Natural Gas (LNGA). The Henry Hub natural gas price surged 12.9% last week as colder weather hit the east coast of the US. The cold snap is likely to eat into storage levels earlier in the season than initially expected. Nevertheless, the US meteorologists believe that the winter will be relatively mild allowing for a rebuild in inventory levels after the cold snap.

ETFS Soybeans (SOYB) sees largest outflow since April 2013 as El Niño probability increases. Last week, the Australian Bureau of Meteorology increased the odds of an El Niño event this winter to 70% from 50% previously. An El Niño typically improves soy growing conditions in Brazil and Argentina and will be price negative should it materialise. Investors withdrew US$7.9mn flow from SOYB.

Key events to watch this week. Preliminary Q3 GDP data scheduled to be release for the US, the UK and Canada next week, likely highlighting the buoyancy of these three countries compared to other major economies like the Eurozone and Japan. CPI data for the latter countries will give clarity on the need for further stimulus in 2015 from the ECB and BOJ

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

 

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