ETFS Copper (COPA) saw US$18mn of inflows as US, German and Chinese PMIs indicate economic recovery remains on track . Notwithstanding the difficulty in interpreting the Chinese data during the New Year period, manufacturing PMIs remained above 50 (signalling expansion) in the US, Germany, and China which contrasts to the weakness in UK, French and Italian PMIs. Silver and palladium ETPs also saw some small inflows as the economic recovery boosts their industrial demand potential.
Physically-backed gold ETPs experience fourth consecutive weekly outflow, totalling US$192mn. Outflows from gold ETPs in February 2013 were the largest since January 2011, as the US Dollar weighed on the gold price. Gold prices were particularly choppy last week, rising to US$1614/oz (+2.0%) after the Italian election results rattled investors, before falling to US$1579/oz (-2.3%) by the end of the week. COMEX net long speculative positions in gold also rebounded from recent lows and interest in the metal may rise further as markets digest the implications of the political deadlock in the US.
ETFS Coffee (COFF) gained US$4.9mn of inflows, the largest since April 2011. After Arabica coffee prices fell 7% in the first half of February and oversupply fears abated, investors saw an attractive time to increase coffee positions.
Key events to watch this week: US Non-farm payrolls data will receive much attention this week given the Fed’s pledge to keep quantitative easing going until employment numbers significantly improve. A number of central banks are due to have policy meetings this week including the Bank of Japan, European Central Bank, Bank of England, Reserve Bank of Australia and Bank of Canada. While none of the central banks are expected to make any policy changes this week, investors will focus on any clues for future rate cuts or asset purchases.