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Cyclical Commodities Find Favour In Early 2012
Sally Ling
5 April 2013
In the first quarter of 2013, commodity investors moved
out of gold exchange-traded products and into more cyclical commodity ETPs such
as silver, copper, palladium, platinum and broad commodity trackers. According
to research from ETF Securities, gold ETPs saw $9.2 billion of outflows during
the quarter as improving US growth data had a negative effect on gold prices.
During the quarter, silver saw the strongest inflows of any single
commodity, with $875 million of net new money. Broad diversified commodity
ETPs were next with $288 million of inflows. Agriculture ETPs also had a strong quarter, with
broad diversified agriculture ETPs receiving $117 million of new inflows. This follows
nearly 20 consecutive months of selling to the end of 2012. Both oil and
natural gas ETPs saw large net outflows as higher prices caused investors to
take profits. “Since the Cyprus deposit confiscation, gold
inflows have resumed (albeit tentatively) and flows into more cyclical commodity
ETPs have slowed or reversed. How Europe deals with Cyprus and potential
contagion to other peripheral European economies, and the sustainability of
strong growth data from the US, will likely decide whether the recent reversal
in the rotation out of gold into cyclical commodities is the beginning of a new
trend or just a pause before the cyclical bull run continues,” Nicholas Brooks, head
of research and investment strategy at ETF Securities, said in a statement.