Investors still keen on physical gold ETPs

Inflows into physical gold ETPs increase by $1.7bn

Investors still keen on physical gold ETPs

Investors still keen on physical gold ETPs

Evidence appears to be mounting that investors are steadily coming back to physical gold ETPs as a hedge against increasingly volatile global markets.

Global inflows into physical gold ETPs increased by US$1.7bn for the year to the end of April, according to the latest report on the ETP Landscape from BlackRock.

This is supported by the latest weekly report from ETF Securities, dated May 11, in which Martin Arnold, director of research, explained: “The outlook for cyclical commodities has improved following China’s central bank cutting interest rates once again in order to stem the slowdown in economic activity. However, risk appetite could be limited, with sharp moves in both directions for benchmark equities keeping investors on edge. As a result, gold appears to have come back into favour as a defensive hedge against declining sentiment, with ETFS physical gold ETPs receiving the largest inflows in 12 weeks, totalling over US$38mn. The precious metal appears set to benefit again this week, with Greek debt negotiations likely to prevent any significant upswing in investor risk appetite.”

ETF Securities has a year-end price target of $1300 for gold and $18.5 for silver.

Equity Release as commodity

Equity Markets are less volatile as trades can be undertaken even in a single share, while commodity markets are highly volatile as trades are conducted in huge lot sizes. Equity markets are less risky as low volatility is there, the Commodity market is highly volatile as a result of the same these are highly risky.

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