Sizeable ETF outflows weighing on gold and silver – Commerzbank

During the course of yesterday, gold shed all of the gains it had initially accrued and dropped to $1,820. Meanwhile, silver trades at $21 as compared with around $25 at the beginning of the quarter. ETF outflows play their part in the poor performance of precious metals, according to strategists at Commerzbank.

Gold/silver ratio is at a very high level at around 86

“Another sizeable outflow from ETFs presumably put pressure on gold: holdings in the gold ETFs tracked by Bloomberg were reduced by a good 6 tons yesterday. The momentum of outflows has picked up pace again of late.” 

“The silver ETFs tracked by Bloomberg have seen considerable outflows in recent weeks and months. Their holdings have been slashed by 1,100 tons since the beginning of the month. Outflows since the start of the quarter have so far totalled more than 1,300 tons.”

“The weakness of silver is also evident in the gold/silver ratio, which is at a very high level at around 86. As an investment metal, silver is under pressure not only from gold – as an industrial metal, it has also been facing headwinds generated by the sharp falls in metals prices.”