Precious Metals & Minerals Weekly Valuation Tables
Charts of the Week: Global gold ETF holdings and COMEX net speculative position
This week, we highlight the total holdings of Gold ETFs along with the total long/short COMEX speculative positioning. Over the past two months, inflows into global gold ETFs have accelerated as fundamental investors have returned following the sell-off that began post-US election. Currently, global gold ETF holdings total 58.9Moz, while the net speculative position sits at 15.2Moz.
Since February of this year, global gold ETF holdings have increased by 2.1Moz as inflows into gold ETFs accelerated and the gold price saw support around the $1,200/oz level. This was followed by a sell-off in the lead up to the March FOMC meeting, after which inflows returned and the gold price strengthened in part due to increased geopolitical concerns and a slightly more dovish view by the Fed and decrease in expectations from four rate hikes this year to three. The COMEX net speculative position has also increased by 2.3Moz over the past week with increased long positioning, up from 12.1Moz at the start of the year.
We view the reacceleration of inflows into physical gold ETFs as a positive sign fundamentally, and believe that we will continue to see inflows due to geopolitical concerns, persistence of low real rates globally, and growing US inflation expectations. However, we remain cautious going into Q2/17, which is typically weaker from a seasonality perspective, and have seen technical resistance this year as gold approaches the $1,260/oz level. We would recommend investors utilize any pullbacks as an entry opportunity and focus on companies with attractive margins, solid balance sheets, organic growth opportunities and a consistent operating strategy. Outperform-rated gold and silver companies in our global universe of Tier I, II, and III producers include: ANG, ABX, KGC, POLY, BTO, CEY, EGO, EDV, KL, OGC, THO, TXG, AUY, ASR, DPM, GUY, KDX, PG, ROXG, SAR, TMR, TXG, CDE, HOC, PAAS, SLW, FNV, OR, and RGLD.
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