Gold-Backed ETPs See Positive Flows In April

Author: Paul Ploumis
05 May 2015 Last updated at 03:39:15 GMT
(Kitco News) - The world’s biggest gold-backed exchange-traded product (ETP) showed investment flows were modestly positive last month.

According to data compiled by SPRD Gold Shares (NYSE: GLD), investor inflows for all of April totaled 2.12 tonnes, this is up significantly from March, where investor outflows totaled 26.25 tonnes.

The data also shows that May is off to a positive start as ETPs saw inflows of 2.39 tonnes Friday, the first trading day of the month. So far for this year, investment flows remain positive as GLD benefited from strong demand January and February.

As of Friday, the ETPs total gold holdings stood at 741.75, tonnes. Analysts at Commerzbank noted in a research report Monday that the inflows were interesting as on the same day, Comex June gold futures dropped to a six-week low.

Commerzbank said that long-term investors appear to be moving into gold as recent economic data points to continued slowing of the U.S. economy and equity markets struggle to make new gains.

Analysts at Barclays also agreed that long-term investors appear to be taking advantage of lower gold prices.

"The relative stability of ETP flows despite lower prices is supportive for gold, suggesting that investors see the lower price environment as an opportunity to buy rather than liquidate,” they said.

Axel Merk, president and CEO of Merk Investments, said, in an email to Kitco News, he has also seen an increase in volume in Merk’s gold ETP (NYSE: OUNZ), “and checking with the market makers, there appears to be more buying than selling interest.”

He added the short-term outlook remains uncertain as strong investment demand fights against growing expectations of lower prices.

"In the medium term, the Fed is bound to be hesitant which should keep supporting gold,” he said.

Courtesy: Kitco News