In this week’s Commodity ETP Weekly from ETF Securities it has revealed that Gold has outperformed equities so far in 2014, which may provide further attraction for investors.
- Long gold ETPS saw their largest inflows since August 2013
- Long gold ETPS saw US$44.0mn of inflows, mainly in the physically-backed products
- Gold purchases in China rose 51% in December , taking net imports of the metal to 1,108.8 tonnes in 2013 (a 33% rise over 2012).
ETF Securities expect to see further flows out of emerging markets and gold is likely to be a key beneficiary given its risk-off hedge status due to the sharp depreciation of the Argentine peso and Turkish lira in recent weeks and less monetary stimulus from the Fed.
Meanwhile, another sharp dip in temperatures in the US caused energy storage drawdowns, which prompted price hikes across the sector.
- Long natural gas ETPs see US$40.9mn of outflows on profit-taking and shorts rise after price rise to a four year high.
- As investors position for the decline in demand they withdrew their elevated long positions.
- Investors also placed US$9.1mn in short ETP positions, the highest since June 2011.
- Historically, February marks the beginning of a period of a seasonal decline in natural gas consumption.
Industrial metals remained pressured as weaker-than-expected manufacturing surveys in China set-back sentiment. However, while survey data has softened, actual economic activity remains robust and should provide a backstop for commodity prices.
Copper:
- ETFS Copper (COPA) led the general trend of outflows in base metals with US$14.8mn of redemptions.
- As Chinese manufacturing PMIs softened further this month, investors’ cut positions in base metals.
- Some base metals benefited from Indonesia’s ban on mineral exports earlier this year
- Enthusiasm was trimmed after the market realised that sufficient stockpiling the minerals in China should avoid any near-term shortage.
Platinum
- ETFS Physical Platinum (PHPT) received US$7.3mn of inflows as South Africa mining strikes spread.
- The National Union of Metalworkers of South Africa (NUMSA) said that its members will stage a strike at Anglo American Platinum’s (Amplats’) mines joining the Association of Mineworkers and Construction Union (AMCU).
- The NUMSA strike will therefore have a material impact on output, given its majority position.
