Investors plow money into precious metal ETFs

September 9, 2019 | Alternative Investments
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Fears of a recession are driving investors to safe-haven hard commodity ETFs

Precious metals ETFs are hitting new highs. Macroeconomic factors such as trade wars, fears of a global recession, and political turmoil such as Brexit are fueling the price surge.

Last week, spot gold prices scaled a six-year high of $1,557, while silver perched at a three-year high. Clearly, a flight to safety is happening.

Apart from global growth concerns, investors are seeking to diversify out of highly over-priced bonds and Treasuries at record low yields.

Top-heavy stock markets are also a cause for concern.

Why Precious metals ETFs are Winning

Hedge fund guru Ray Dalio expressed fears of a “paradigm shift” in investor mindset. His reasons ranged from weak central banks and high global debt to weaker earnings.

“I believe that it would be both risk-reducing and return-enhancing to consider adding gold to one’s portfolio,” Dalio said.

Yields on a third of worldwide investment-grade debt amounting $17 trillion are negative, according to Bloomberg.

This phenomenon is making precious metals more attractive to investors both as an alternative diversification and safe-haven shelter.

Funds flood precious metal ETFs

Precious metal ETFs offer a quick and cheap way to invest in precious metals. It’s not surprising therefore to see solid inflows into these funds:

Precious Metal ETF Inflows (YTD)

Ticker    Fund                                                                                                      Inflows ($M)

GLD        SPDR Gold Trust                                                                               4,346

IAU        iShares Gold Trust                                                                              2,160

SLV         iShares Silver Trust                                                                            1,164

GLDM   SPDR Gold MiniShares Trust                                                             423

BAR        GraniteShares Gold Trust                                                                  208

PPLT      Aberdeen Standard Physical Platinum Shares ETF                      102

SGOL     Aberdeen Standard Physical Swiss Gold Shares ETF                    93

DGL        Invesco DB Gold Fund                                                                        57

AAAU    Perth Mint Physical Gold ETF                                                            52

DBP        Invesco DB Precious Metals Fund                                                      8

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