EDITOR'S NOTE: Don't Miss a Beat! Sign-up for the Kitco News Weekly Roundup– our newsletter highlighting our most popular features, articles and videos! Register Here

Gold-Backed ETPs Continue To Attract Long-Term Investors

By Kitco News
Monday February 23, 2015 11:00 AM

(Kitco News) - The gold market continues to attract long-term investors as gold-backed exchange-traded products (ETPs) continue to see weekly inflows, despite a drop in future prices.

Analysts at Barclays noted that according to the latest data, global gold ETPs held 1,791 tonnes of the yellow metal in trust. They also noted that the pace of inflows is starting to slow.

They added that it appears the ETP market is attracting more long-term investors “as the latest 13F filings show, 93% of the metal bought this year is already cash negative given the decline in prices.”

Last week future gold prices dropped below the key psychological support area of $1,200 an ounce, but despite the weakness in the future market, ETPs saw an increase in its gold reserves. SPDR Gold Shares (NYSE: GLD), the largest gold-backed ETP, saw its gold reserves increase by 2.99 tonnes last week. As of Friday, GLD’s reserves stood at 771.25 tonnes.

Since the start of the year, GLD has seen investor inflows totaling 62.23 tonnes.

In an interview with Kitco News on  Friday, Ole Hansen, head of commodity strategy at Saxo Bank, said that gold is seen as an attractive investment among retail investors, which is why the market has seen an increase in reserves while the price in the future market continues to weaken.

“Bonds are unattractive because at the moment if you want to buy secure bonds you have to pay for the privilege and that is leaving gold as a good alternative,” he said.  

Related Stories:

By Neils Christensen of Kitco News; nchristensen@kitco.com



Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
kitco news

Precious Metal Charts

Click to see this Precious Metal chart
  1. 24h
  2. 30D
  3. 60D
  4. 6M
  5. 1Y

Interactive Chart