Nyheter
Commodities Looking Increasingly Attractive At Current Levels
- Commodity ETP Weekly Commodities Looking Increasingly Attractive At Current Levels
- Long gold and silver ETPs see US$88mn and US$46mn of outflows on negative sentiment.
- Nickel bucks the trend as price drops to a six-month low.
- Profit taking drives US$7mn of outflows from long coffee ETPs.
Negative sentiment towards commodities prevailed last week, prompting some investors to cut their losses. While the striking improvement in the US economy and labour market has prompted the Fed to reduce stimulus and the market to consider an earlier than originally foreseen rate hike, a stronger US economy should benefit cyclical assets. With most commodities trading at multi-year lows and investors mostly short-positioned, we believe most commodities are looking increasingly attractive at current levels.
Long gold and silver ETPs see US$88mn and US$46mn of outflows on negative sentiment
US non-farm payrolls surprised the market on the upside last week, with 248k new jobs added. While the striking improvement in the US economy and labour market has prompted the Fed to reduce stimulus and the market to consider an earlier than originally foreseen rate hike, a stronger US economy should benefit silver. Over 50% of silver demand comes from industrial applications, with China and the US accounting for over 40% of fabrication demand. We believe silver is looking increasingly attractive at current levels. With the US policy finally normalising albeit alongside the better economic outlook, silver price is also expected to pick up momentum. PGMs (“Platinum Group Metals”) also saw outflows last week, as the sharp drop in price prompted investors to cut losses in their portfolio. However, we believe the current price weakness to be temporary as investors will return to focus on the positive fundamentals. Large deficits are already expected in both markets this year and the recent pick up in global auto sales is likely to exacerbate the situation further. With platinum marginal cost of production close to US$1,400oz (11% above current prices) and prices close to or below pre-strike levels, we see value in both metals.
Nickel bucks the trend as price drops to a six-month low
ETFS Nickel (NICK) received US$4.5mn of inflows last week, bucking the negative trend in industrial metals, as investors see the recent price correction as a buying opportunity. While LME stocks have increased by 37% since the beginning of the year, Indonesia, the biggest producer, is sticking to an ore export ban that has drastically reduced the expected surplus to 10,900 tons from 78,100 tons last year. Meanwhile, ETFS Aluminium (ALUM) and ETFS Copper (COPA) suffered US$130mn of combined outflows as negative sentiment towards industrial metals persisted. Although China’s official manufacturing PMI remained unchanged at 51.1 in September, fears of a slowdown in the economy have weighed on metals lately. With most commodities now trading at multi-year lows, we believe it is a good time to increase the exposure to this asset class.
Profit taking drives US$7mn of outflows from long coffee ETPs
Prices have been rising on the back of fears that continued dry weather in Brazil, the biggest producer, might negatively impact next year crop. Brazil’s worst drought in decades saw Arabica coffee prices soaring 88% since the beginning of the year.
Key events to watch this week. The release of the Fed minutes and Bank of England rate decision will be the centre of attention this week as the market judges the timing of the first rate hike in both countries. With US Non-Farm Payrolls surprising the market on the upside last week and the US economy continuing to strengthen, the Fed is likely to tighten earlier than originally anticipated.
Video Presentation
Simona Gambarini, Research Analyst at ETF Securities provides an analysis of last week’s performance, flow and trading activity in commodity exchange traded products and a look at the week ahead.
Important Information
This communication has been provided by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority.
The UK is shaking up crypto. This month, the Financial Conduct Authority (FCA) proposed lifting its ban on crypto exchange-traded notes for retail investors, a positive step in a global race to regulate digital assets and provide consumer protection.
Key metrics show Bitcoin’s rally isn’t over
Bitcoin is above $100K, and key indicators suggest a growing momentum and a potential for further upside. The Bitcoin Fear & Greed Index sits at 62, reflecting a sentiment that remains near neutral. This lack of extreme greed suggests that the rally may still have room to run in the near term.
Apple wants to enter Circle’s orbit. Why are stablecoins the tech world’s new darling?
Stablecoin issuer Circle made a blockbuster debut on the New York Stock Exchange earlier this month. Now, tech giants like Apple, Meta, and Google are reportedly exploring stablecoin integrations, marking another major step toward merging digital assets with mainstream technology.
Research Newsletter
Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com
Disclaimer
The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.
GIGU ETF investerar aktivt i USD-denominerade företagsobligationer
UK looking to lift the retail ban on crypto ETPs
AMEM ETF, de ledande aktierna från tillväxtmarknaderna i en enda transaktion
21Shares noterarar fem nya krypto-ETPer Nasdaq Stockholm
EXSG ETF ger exponering mot europeiska utdelningsaktier
Montrose befäster sin position som den populäraste ETFen
BNP Paribas Asset Management lanserar Europe Defense ETF
Global X noterar Europafokuserad försvarsfond
Kommer Nordea att lansera nya börshandlade fonder?
Nu introduceras fem nya europeiska börser på Nordnet – courtagefri handel under maj
-
Nyheter2 veckor sedanMontrose befäster sin position som den populäraste ETFen
-
Nyheter3 veckor sedanBNP Paribas Asset Management lanserar Europe Defense ETF
-
Nyheter4 veckor sedanGlobal X noterar Europafokuserad försvarsfond
-
Nyheter3 veckor sedanKommer Nordea att lansera nya börshandlade fonder?
-
Nyheter4 veckor sedanNu introduceras fem nya europeiska börser på Nordnet – courtagefri handel under maj
-
Nyheter3 veckor sedanBlackRock lanserar europeisk försvars-ETF för europeiska investerare
-
Nyheter3 veckor sedanYieldMax™ tillkännager första utdelningen för YYYY
-
Nyheter4 veckor sedanRivstart för Montrose ETF-satsning!
