Etikett: Simona Gambarini

Gold and Oil ETP Inflows Benefiting from Heightened Geopolitical Risks

Gold and Oil ETP Inflows Benefiting from Heightened Geopolitical Risks

Gold and Oil ETP Inflows Benefiting from Heightened Geopolitical Risks. Geopolitical risks drive the 7th consecutive week of inflows into long gold and oil ETPs.

Profit taking prompts US$3.7mn of outflows from ETFS Physical Palladium (PHPD).

ETFS Copper (COPA) sees fifth weekly inflow, totalling of US$6.9mn, as US growth picks up pace.

Price correction drives the highest inflows since May 2014 into ETFS Soybeans (SOYB).

Investors’ focus remained on geopolitical risks last week, with gold and oil ETPs seeing the 7th consecutive week of inflows, as the Ukrainian-Russian conflict escalates. Russian posturing appears to be escalating and increasingly questioning Ukrainian sovereignty and the UN has urged Western nations to intervene. While oil and gold prices are yet to react to heightened risks, investors are rebuilding hedges into their portfolios.

Geopolitical risks drive the 7th consecutive week of inflows into long gold and oil ETPs. Long oil ETPs saw US$11.8mn of inflows, as the Ukrainian-Russian conflict escalates. The United Nations accused Russia of having more than 1000 regular troops in the Ukraine, pressuring Western countries to intervene. While both oil and gold prices are yet to react to heightened geopolitical risks, investors have been building positions as a hedge against further deterioration of the situation in Eastern Europe and the Middle East. Russia is the world’s 2nd biggest oil producer after Saudi Arabia, accounting for 13% of global oil output and 16% of world total exports in 2013. Should Russia ban oil exports, it is unlikely that Saudi Arabia capacity to fully compensate for the loss in production. With the EIA forecasting a 9,000 barrel a day surplus in 2014, the loss of a portion of the 10.7mn barrels a day from Russia could have a substantial impact on prices. Meanwhile, long gold ETPs saw US$13.4mn of inflows last week, as investors become increasingly defensive.

Profit taking prompts US$3.7mn of outflows from ETFS Physical Palladium (PHPD). Palladium ETPs have seen over US$100mn of outflows over the past months as fears of trade sanctions against Russia, palladium biggest producer, drove the price higher. While palladium is likely to continue being buoyed by potential supply disruptions in Russia, we believe platinum underperformance is excessive and anticipate the spread between the two metals will widen over the next few months.

ETFS Copper (COPA) sees fifth weekly inflow, totalling of US$6.9mn, as US growth picks up pace. The US Department of Commerce revised Q2 growth upwards to 4.2% from 4.0%, on stronger business spending and exports. We believe fears of copper oversupply are overblown and that copper remains attractive at current price levels. We expect investors are now beginning to focus on tightening supply-demand conditions and we expect the copper price to rebound to around US$7,500. Meanwhile, profit taking drove US$2.5mn of outflows from ETFS Aluminium (ALUM) as the price hit US$2,100 for the first time in 18 months.

Price correction drives the highest inflows since May 2014 into ETFS Soybeans (SOYB). Soybeans price tumbled to a nearly 4-year low last week, on record crop expectations from the US. About 70% of soybeans in the main growing areas were deemed in good or excellent condition as of August 24. This is the highest level seen since 1992 at this time of the year. However, early signs of Sudden Death Syndrome (SDS), a disease that contaminates the crop, showed up in the Midwest over the past week and threatens to drastically reduced yields. With soybean prices having lost over 18% since the beginning of the year, investors are starting to rebuild positions.

Key events to watch this week. Bank of England, the European Central Bank and the Bank of Japan will all be holding policy meetings this week. The focus will likely be on the ECB following Draghi’s dovish speech in Jackson Hole two weeks ago. Jobs are a key concern for policymakers and US non-farm payrolls later this week are expected to show the US recovery remains robust. Manufacturing data will also be released this week for China, India, the Eurozone, the UK and the US, to gauge the relative pace of the global recovery.

Download the complete report (.pdf)

Video Presentation

Simona Gambarini, 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, Silver and Oil ETPs see Strong Inflows as Situation in Iraq Deteriorates

Gold, Silver and Oil ETPs see Strong Inflows as Situation in Iraq Deteriorates

ETF Securities – Gold, Silver and Oil ETPs see Strong Inflows as Situation in Iraq Deteriorates

Last week, the Iraqi conflict remained in focus, with precious metals and oil ETPs seeing strong inflows on fears of a deterioration of the situation in the country. The Islamic State in Iraq and the Levant announced the establishment of a caliphate earlier today, spurring fears extended violence may be inevitable. Meanwhile, a stronger than expected China’s HSBC manufacturing PMI last week indicates that stimulus policies are starting to have an impact on the economy, prompting investors to become more positive on cyclical commodities such as industrial metals. We believe growth bottomed in Q1, with a relatively rebound in store in H2, marking a key economic turning point after three years of slowdown.

 

Download the complete report (.pdf)


Iraqi conflict drives US$119.5mn of inflows into long gold ETPs. The Islamic State in Iraq and the Levant’s (ISIS) attack in northern Iraq has driven up safe haven asset demand, with gold ETPs seeing the second consecutive week of inflows and the largest since March 2013. Both gold and silver prices rose to multi-week highs last week as investors are concerned about the violence spreading further south, potentially eventually leading to an outright civil war. Brent crude ETPs also saw continued inflows on the back of the Iraqi conflict last week.

Long silver ETP inflows rise to the highest level since March. A 4.5% rise in the silver price helped drive US$26.9mn of inflows into silver ETP last week. While the recent rally has likely been driven by the elevated correlation of silver with gold, its wide use in industrial applications puts it in a good position to benefit from a global recovery. With silver demand increasing on the back of a recovering global economy and total supply declining, another supply deficit is expected this year.

Long wheat ETPs see another week of strong inflows on low inventory expectations. The USDA will release its quarterly report on US inventories later today. However, expectations are for ending wheat stocks to be at a 6-year low, prompting investors to accumulate US$10.6mn into long wheat products ahead of the report. Abundant rainfall in the US Midwest could also boost wheat prices as it could delay harvesting or spoil the quality of the wheat. At the same time, ETFS Corn (CORN) saw US$10.2mn of outflows on abundant supply. Inventories are expected to be at 4-year high despite potential damage caused by the recent heavy rainfall.

Industrial metals are back in favour as China’s outlook improves. ETFS Industrial Metals (AIGI) recorded US$34.4mn of inflows last week, the largest in over 3 years, as looser policy in China is likely to favour cyclical commodities. We believe growth bottomed in Q1, with a rebound in store in H2, marking a key economic turning point after three years of slowdown. At the same time, investors withdrew US$30.2mn from ETFS Daily Short Industrial Metals (SIME) as they became more positive on the industrial metal sector. Profit taking and short covering drove US$12.0mn of outflows from both long and short copper ETPs last week as the price jumped 3.7%. Meanwhile, long nickel ETPs recorded US$3.6mn of inflows as the recent price correction is seen as a buying opportunity.

Key events to watch this week. This week investors will likely focus on the European Central Bank rate decision and US non-farm payrolls, both to be released on Thursday, as the US market will be closed for the Independence Day on Friday. While no major initiatives are expected to be announced during the ECB meeting, it will be interesting to see what President Draghi will say at the press conference following the meeting. China’s official PMI release and US ISM manufacturing index will also be watched closely as investors assess the strength of the two economies.

Download the complete report (.pdf)

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

Important Information

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 communication or its contents.

ETFS UK is required by the 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.

This communication 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 communication nor any copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States.

This communication constitutes an advertisement within the meaning of Section 31 para. 2 of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG); it is not a financial analysis pursuant to Section 34b WpHG and consequently does not meet all legal requirements to warrant the objectivity of a financial analysis and is also not subject to the ban on trading prior to the publication of a financial analysis.
If you have any questions please contact ETFS UK at +44 20 7448 4330 or info@etfsecurities.com for more information.

Should you still hold gold?

Should you still hold gold?

ETF Securities – Should you still hold gold?

Simona Gambarini, associate director of research at ETF Securities, says investors are rotating from gold ETFs into more cyclical commodities as they are less concerned about global risks.

Listen to Simona Gambarini explain if you still should hold gold.

It is becoming increasingly important for investors to consider ideas that are different from traditional asset classes and strategies. For nearly a decade, investors looking for alternative investment opportunities have relied on the expertise of ETF Securities.

ETF Securities is the world’s leading, independent exchange-traded product provider and a pioneer in commodities. We are dedicated to developing liquid, transparent investment solutions that can be traded on world stock exchanges.

Institutional investors, intermediaries and the individuals they ultimately serve trust ETF Securities to provide convenient, efficient and transparent exposure to commodities and other innovative investment strategies.