Volatile global financial markets and a shift in investor sentiment were contributing factors to the rise of commodities exchange traded products in the first quarter.

After being severely punished last year, exchange traded funds backed by physical holdings of gold rebounded in the first quarter with the SPDR Gold Shares (NYSEArca: GLD) posting a gain of 4.8%.

“After seeing selling in January, gold ETPs moved strongly back into favour in February and March as investors revised down their highly bullish US growth assumptions and revised up the global risk outlook. Broad commodity ETPs also saw a turn in sentiment, with asset allocators rotating into the asset class as an alternative to overstretched developed market equities,” said ETF Securities Head of Research and Investment Strategy Nicholas Brooks in a new note.

Total assets invested in commodity ETPs increased to $122.4 billion at the end of Q1 2014 from $122.1 billion at the end of last year, with precious metals, agriculture and industrial metals seeing the bulk of the inflows. Silver saw the largest inflows during quarter as investors looked to the metal as a leveraged play on improved sentiment towards gold, according to ETF Securities

Globally, investors pulled $946 million from gold ETFs in January, but they returned to ETFs like GLD and the ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) in February and March, allocating a combined $858 million to gold funds in those two months. [Strong Demand Seen for Gold, Silver ETFs]

Although the iShares Silver Trust (NYSEArca: SLV) and the ETFS Physical Silver Shares (NYSEArca: SIVR) finished the first quarter with modest losses, silver ETFs pulled in $354 million in the first quarter and was one of the few commodities to see inflows in each of the first three months of the year, according to ETF Securities. [Silver ETFs Gain Supporters]