ETF Investors Rush To Precious Metals

September 06, 2019

Recession fears are pushing Treasury bond prices to record highs this year, but they aren’t the only safe havens rallying. Precious metals are also on the upswing, buoyed by strong demand from ETF investors.

This week, spot gold prices spiked as high as $1,557, a six-year high, and up more than 20% year to date. Silver, palladium and platinum are all up by similar amounts this year also—though none of them quite has the safe haven reputation of gold.

Silver last found itself at a three-year high and platinum at a 1 ½-year high. Palladium, meanwhile, is trading near record highs amid shortages caused by tightening emissions standards for gasoline-powered cars.


Precious Metals Returns (YTD)


Alternative Safe Havens

Demand for precious metals ETFs in 2019 has been robust as investors seek alternative safe havens to Treasuries and other government bonds. Yields around the world have fallen to rock-bottom levels and a third of worldwide investment-grade debt—$17 trillion worth—is yielding less than zero, according to Bloomberg.

Plunging yields make precious metals increasingly attractive as stores of value, reducing the opportunity cost of holding them.

That thesis is playing out in precious metals price action and precious metals ETF flows. So far this year, billions have flowed into this space. The SPDR Gold Trust (GLD) has picked up $4.3 billion; the iShares Gold Trust (IAU) gathered $2.2 billion; and the iShares Silver Trust (SLV) took in $1.2 billion.

Hundreds of millions more entered smaller competitors, like the SPDR Gold MiniShares Trust (GLDM), the GraniteShares Gold Trust (BAR) and the Aberdeen Standard Physical Platinum Shares ETF (PPLT).

According to Bloomberg, ETFs now hold the most silver and platinum they ever have, while the amount of gold in ETFs is only 3 million ounces off its record from 2012.

PM 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
Source: Fund Flows Tool, powered by FactSet

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