Demand Strong for Gold, Silver ETFs, Says ETF Securities

February 24th at 12:11pm by Tom Lydon

Thanks to rebounding prices in the commodities pits, gold and silver exchange traded funds are once again being favored by investors.

ETF Securities, the ETF provider known primarily for its lineup of commodities funds, said its long gold ETPs last week saw $38 million  of inflows, bringing inflows over the past two weeks to $46 million. The firm’s U.S.-listed gold ETFs include the ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) and the ETFS Physical Asian Gold Shares (NYSEArca: AGOL).

Last week, UBS boosted its forecast for gold in 2014 to a one-month forecast of $1,280 an ounce from $1,180 and the three-month outlook to $1,350 from $1,100. UBS analysts Edel Tully and Joni Teves upwardly revised their gold projection to an average $1,300 in 2014 from the previous estimate of $1,200, with a 2015 target of $1,200. [Gold ETFs Rebound]

Entering Monday’s session, the ETFS Physical Silver Shares (NYSEArca: SIVR) sported a 9.1% year-to-date gain.

“The silver price has rallied 12% so far this year, ahead of gold’s 10% increase over the same period. Silver is viewed by some investors as a leveraged version of gold. Since 2000 on average during months the gold price has increased silver has gained about 1.4 times the gold price increase. In 2013 the silver price declined about 1.3 times more in percentage terms than the gold price. This may explain why investors have been building their positions in silver ETPs this year,” said ETF Securities in a note out Monday.

The ETFS Physical Platinum Shares (NYSEArca: PPLT) is up 1.8% year-to-date, platinum prices could see more upside in the near-term due to ongoing labor strife in South Africa, the world’s largest producer of the metal. [Platinum Prices Could Soar]

“Platinum ETPs received US$2.5mn of inflows, as labour unrest in South Africa continues. We are now 23 working days into the strike and producers should only have a few weeks of stocks left. So far 230,000 ounces of production have been taken off the market, equivalent to almost 4% of 2013 global platinum supply. Should the strikes persist for a few more weeks, the price of platinum could react strongly,” according to ETF Securities.

ETFS Physical Silver Shares

ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.