ETF Securities gold assets reach all time high

February 26, 2009

Commodity Online
LONDON: Gold continues to attract strong safe haven flows, with gold prices breaking through $1000/oz last week on strong investor demand for physically backed gold. Physically-backed gold ETC inflows rose $31 million last week, equivalent to 44,937 ounces.

ETF Securities has seen a 33% increase in gold holdings over the past 3 months to all time highs, bringing gold assets to $7.0 billion (7.03mn ounces), the largest gold ETC/ETF holdings in Europe, and the second largest in the world, according to a weekly review by ETF Securities Ltd.

Oil ETCs have also grown rapidly, with ETFS Crude Oil (CRUD) showing the strongest weekly inflows of any ETC last week at $54.8 million. Total Energy ETCs inflows are up $508 million since the start of 2009, just behind precious metals at $598 million. ETFS Leveraged Crude Oil (LOIL) was in the top 5 ETC inflows last week, up $15.2 million. LOIL is also in the top 5 ETC inflows over the past 12 months, accounting for half of all leveraged ETC inflows since its inception in early 2008.

ETFS Agriculture (AIGA) has been another standout performer, with the 4th largest ETC inflows at $22.5 million last week. Weekly inflows into all agriculture-related ETCs have averaged $26 million over the past 5 weeks, making agriculture the third highest ETC sector by inflows over this period behind energy and precious metals.

Both grains and softs prices are up over 10% since the start of December, reflecting factors such as dry growing conditions in South America and reduced plantings at the end of 2008.

Other precious metals have received renewed interest, with ETFS Physical Platinum (PHPT) inflows reaching $14.4 million last week, equivalent to 14,423 ounces. ETFS Physical Palladium (PHPD) has also increased $13 million over the past two weeks, bringing combined PHPT and PHPD inflows to $44 million over the past fortnight. PHPT and PHPD weekly prices are up 38% and 32% respectively since the start of December compared to gold’s 32% rise over the same period.

ETFS Physical Silver (PHAG) has seen the strongest ETC returns so far in 2009, up 32% YTD. PHAG also saw the strongest ETC returns last week, with a 7% rise capping 5 consecutive weeks of gains. PHAG has outperformed PHAU by 16%, and other physical precious metals by between 10-16%, since December 2008. Despite this outperformance, the Gold:Silver price ratio remains above its 20 year average, ETF Securities Ltd said in their weekly report.

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