So far 2012 has been good for the major metals. Gold, palladium, platinum and silver prices have moved up strongly off their late 2011-early 2012 lows.
AdvisorOne asked Will Rhind, managing director, ETF Securities U.S. LLC, which has assets under management of $4.5 billion in the U.S. and US$30 billion worldwide, for his thoughts on the key recent and emerging trends in the metals market.
According to a recent research report form ETF Securities: “The gold spot price saw its 11th consecutive annual increase in 2011, its longest unbroken rise since its post-Bretton Woods free-float in the early 1970s. The gold price also set a record by rising above US$1,920/ounce last year.
“Despite the strong performance, the gold spot price ended 2011 below US$1,600/ounce as a result of exceptionally volatile trade, with prices dropping through their 200-day moving average trend line for the first time since the 2008 credit crisis,” the report explained. “Gold futures net long speculative positioning hit its lowest level in over 2 years at the end of 2011.”
The spot price had recovered to over $1,700 by mid-February, so what should investors focus on for the year ahead? ETF Securities’ research highlights several themes:
- High macro uncertainty, easy monetary policy by developed economy central banks, low real interest rates and sovereign debt risks: In this environment investors are likely to continue to favor hard assets, with gold standing out as key focus.
- Sustained growth in net official sector purchases and exchange-traded product holdings paints an optimistic gold price picture from strategic investors.