Commodity ETF Inflow/Outflow: Gold Suffers While Miners Gain?

| June 12, 2013 | 0 Comments

inflow-outflowNo doubt about it, commodities are all over the map in recent trading.  With the recent drawdown in the US Dollar, investors are piling money into specific hard asset ETFs.  However, some ETFs are still seeing hefty redemptions.

Here are a few of the biggest losers from the week of June 7th

On the top of the list for commodity ETF outflows is the SPDR Gold ETF (GLD).  As you’re likely aware, this ETF has been the go-to-choice for anyone bullish of gold over the past few years. 

My how times have changed… 

GLD has consistently seen the biggest asset outflows of any ETF on the market over the past few months.   And last week was no different with the GLD shedding $244 million.  As the price of the yellow metal crashed in 2013, investors redeemed GLD at an alarming pace.

The second biggest outflow number came from the ETFS Physical Swiss Gold (SGOL).  The gold backed ETF saw $62 million in assets hit the road last week.

Another big loser was the iPath Pure Beta Seasonal Natural Gas ETN (DCNG).  This thinly traded ETN had a huge bout of selling on May 31st and lost $45 million in assets for the entire week.  DCNG’s huge outflow is likely due to the increasingly bearish nature of EIA natural gas inventory data over the past two weeks.

The last big loser for the week was the iPath DJ-UBS Commodity Total Return ETN (DJP).  This all-encompassing commodity ETF sliced off $33 million in assets.

Enough of the losers, let’s look at the commodity ETFs with big inflows…

The largest gainer of the week, and definitely the most surprising, is the Market Vectors Gold Miners Fund (GDX). 

GDX is one of the best ways for investors to acquire a diverse holding of gold miners.  And last week the ETF saw $205 million in assets added to the fund.

This is a peculiar development for GDX.  With the spot price of gold falling, and investors becoming ever more wary of another big downdraft in the yellow metal, it’s strange to see such a big rush into gold miners.

Are investors finally realizing how dirt-cheap gold miners are? 

I’ll be watching for a continuation of GDX inflows in coming weeks.  If the trend persists, it could mark a bottom for heavily oversold gold stocks.

The next biggest gainer was the ETFS Physical Platinum (PPLT).  PPLT saw $72 million in asset inflows as investors started betting on higher platinum prices. 

As you may know, platinum is found primarily in South Africa.  And as of late, the mining industry in South Africa has fallen on hard times due to quickly rising costs and weak metal prices. 

As a result, many of the world’s biggest platinum miners are closing mine shafts and cutting jobs to reduce costs.  This bodes well for future platinum and palladium prices as supply won’t likely be there to support demand.

Another surprising winner was the US Natural Gas Fund (UNG).  The natural gas tracker added $60 million of capital inflows last week.  With natural gas trading sharply lower in recent trading, investors are likely betting on the long-term bullish picture for natural gas, which is still in play.

And finally, the last big gainer for the week was Energy Select SPDR (XLE). 

XLE isn’t a commodity ETF by nature, but it does track companies that produce oil and natural gas.  Names like Exxon Mobil (XOM), Chevron (CVX), and ConocoPhillips (COP) are some of the top holdings in XLE.

As you can see, it was a wild week for commodities.  Stay tuned to Commodity Trading Research for more updates on important inflow/outflow data!

Until Next Time,

Justin Bennett

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Category: Commodity ETFs

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.