Copper ETPs see high inflows

Exchange-traded products (ETPs) based on copper have seen high inflows, while gold ETPs have experienced outflows as sovereign risk fears in Europe abate, according to ETF Securities (ETFS).

The firm says ETFS Copper had record inflows of $29m last week, fuelled by fresh optimism on the state of the Eurozone financial system, along with positive corporate earnings.

ETFS Copper is an exchange-traded commodity (ETC) tracking the DJ-UBS Copper sub-index, on a total return basis. The ETC is a debt security, which gains commodity exposure via third-party commodity contract issuers, whose obligations are secured with collateral covering 100% of the outstanding value.

ETFS says investors are seeking exposure to cyclically-linked investments as confidence in a global economic recovery rises, which in turn is boosting metals prices higher.

However, the firm warns this bout of positive investor sentiment could be tested this week, in light of a range of events including releases on German industrial production and a policy meeting between the European Central Bank and the Bank of England.

In contrast, precious metals have seen the largest outflows in over nine months. ETFS physical gold ETCs experienced outflows of $285m last week, reflecting the rising risk appetite as investors manoeuvre into riskier assets and reduce gold holdings.

Nonetheless, ETFS says flows into its physical gold ETCs still remain the largest on the platform year-to-date, with inflows amounting to $1.3bn. Gold is now trading at around $1170, down from the record $1260 reached earlier this year.