Article / 08 June 2015 at 9:45 GMT

Gold ETP holdings hit new 6-year low; silver resilient

Head of Commodity Strategy / Saxo Bank
Denmark
  • ETPs backed by physical gold droop to six-year low
  • Silver holding its own despite recent weak bout
  • Platinum and palladium cut back, but relatively slightly

By Ole Hansen

Investors have cut total holdings in exchange-traded products backed by physical gold to a new six-year low following five consecutive weeks of selling. Silver is showing sign of resilience despite the recent price weakness while platinum and palladium have seen reductions albeit on a rather small scale compared to the price weakness seen. 

ETP holdings, weekly change











During the first week of June investors continued for a fifth consecutive week to reduce exposure to gold through exchange-traded products. During this time some 35 tonnes have been cut resulting in the total holdings dropping back below 1600 tonnes for only the second time since April 2009.

Gold has been on the defensive during the past few weeks as bond yields have risen and the US dollar's week long correction lower ran out of steam. As a result it has been sliding after finding resistance at $1232 on May 18 and the extension to an 11-week low on Friday was triggered by another stronger than expected US jobs report.

Today we have seen the dollar stabilise after reaching a high of 1,1050 against the euro on Friday while gold has remained relatively calm despite trading below previous support –  now turned into resistance  – at $1178. 

The Greek saga rumbles on but the market increasingly seems to have moved on. The safe-haven interest related to this unsolved problem is receiving less attention. The market consensus still favours an outcome where a last-minute deal will be struck so any renewed talk about bankruptcy and a possible euro exit could trigger volatility.

 Graphical overview of the precious metals:
ETP holdings, graphs




– Edited by Clare MacCarthy

 

Ole Hansen is head of commodity strategy at Saxo Bank 
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