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Commerzbank: ETFs still accumulating gold, silver

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(Kitco News) - Inflows of gold and silver into global exchange-traded funds remain robust, reported Commerzbank Tuesday.

Gold ETFs accumulated another 11 metric tons of metal Monday, including a large inflow by SPDR Gold Shares, said analyst Carsten Fritsch in a research note. This comes on top of the 112 tons that had already gone into these ETFs so far this month as of the end of last week.

“The gold price is still being supported by investor demand, in other words,” he said.

“This is also illustrated by the gold export data released by the Swiss Federal Customs Administration,” Fritsch continued. “Exports in March increased to 96.1 tons, putting them at more than twice their February level. Nearly half of the shipments went to the U.S., presumably to meet the ETF demand there.”

By contrast, there was a sharp decline in the amount of precious metal Switzerland shipped to most major Asian gold-consuming countries, Commerzbank said. In the case of key buyer India, demand has taken a double whammy; lockdowns have closed jewelry shops, and prices in the local currency are at record high prices.

Meanwhile, silver ETFs have posted inflows of 750 tons since the beginning of the month, Commerzbank said.

“This means that silver ETF holdings have risen by just shy of 4%, which corresponds roughly to the percentage increase enjoyed by gold ETFs over the same period,” Fritsch said. “Inflows in silver since the start of the year have now exceeded 2,000 tons.

“The last time such pronounced ETF inflows were seen was in the third quarter of 2019. As was the case at the time, investors today are no doubt also being attracted by the low price level.”

The recent heavy inflows into the silver ETFs began after the gold/silver ratio peaked at 127 in mid-March, meaning an underperformance of silver prices compared to gold, the bank added.

Precious-metals ETFs trade like a stock but track the price of the commodity, with metal put into storage to back the shares.

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