Gold investment via ETPs at new record despite flat performance

Investors looking for a bullish move in gold have used exchange traded products to increase their exposure to a new record. As of yesterday holdings in gold ETPs rose by 4.6 metric tonnes to a new record of 2,412, thereby breaking the recent high of 2,410 set back on March 16. This continued "love" affair with gold through non-leveraged products such as exchange traded products has continued to increase despite the sideways and at times lacklustre performance of gold during the last few months.

There are many different providers of gold ETPs but currently the four biggest which are SPDR, ETF Securities, ZKB and iShares hold approximately 83 percent of the 77.6 million ounces invested.

Speculative traders such as hedge funds have not been so convinced as the loss of momentum has seen them scale back positions since August 2011. The chart below shows CFTC published net long positions held in gold futures converted to metric tonnes for comparison.

Gold investors through ETPs are generally viewed to hold a much longer term view than leveraged investors through futures and if recent developments are anything to go by gold could be shining once again soon.