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Gold ETPs took the lion’s share of outflows
ETF Securities Weekly Flows Analysis – Gold ETPs took the lion’s share of outflows
Highlight
- Gold can’t seem to find a floor
- Strong copper fundamentals appear to defy trade war threats
- Falling nickel prices continue to attract bargain hunters
Gold can’t seem to find a floor. Gold ETP outflows surged last week by US$119.7mn, marking the third consecutive week of outflows as gold prices shed 0.81% last week, declining to US$1231.1. We believe the testimony of Fed Chair Powell before the US Senate had a strong role to play in gold’s weak price performance last week. As his optimistic outlook on the US economy cemented the Federal Reserve’s (Fed) rate hike trajectory for the rest of 2018 supporting the US dollar higher. Since the start 2018, the stronger US dollar (up 3.17%) amidst the rising rate environment in the US, has underpinned the weakness of gold prices (down 6.62%). Last week, Larry Kudlow the US president’s economic adviser, blamed the Chinese President Xi Jinping for stalling of trade dispute talks between the two nations. The Chinese Ministry of Foreign Affairs retaliated aggressively, by announcing that although it did not want a trade war, it was not afraid of one either. In the absence of any productive negotiation, the international trade wars seem to be intensifying and if this trend were to continue we expect inflation to accelerate at the cost of decelerating economic activity, which should favour gold.
According to Commodity Futures Trading Commission (CFTC), net speculative positioning on gold futures are currently 1x standard deviation (as on 13 July 2018) below their 5-year average, highlighting the extent of the negative sentiment towards the yellow metal. We expect, gold prices to stage a recovery over the second half of this year.
Strong copper fundamentals appear to defy trade war threats as copper ETP inflows worth US$26.5mn rose to their highest level in 14 weeks. Last week, Chinese economic growth slowed fractionally to 6.7% year-on-year compared to 6.8% last year.
However monthly data reported by the National Bureau of Statistics (NBS) was mixed with industrial production and investment slowing but retail sales and house price growth higher. As a historically well-regarded barometer of world economic health, copper prices have been caught in the cross hairs of trade wars and slowing momentum from Chinese growth evident from the price slide over the past 6 consecutive weeks to US$6122.5 (as on 20 July 2018). However optimism over the red metals’ strong fundamentals helped overcome the negative sentiment emanating from the trade wars as inflows into copper ETPs rose over the past two weeks.
Failing collective wage negotiations at BHP’s Escondida mine, the world’s largest copper mine, highlight the risks to copper’s current supply levels. Discussions are set to continue as the current collective agreement expires at the end of the month. As both sides have stated their desire to reach an agreement, a strike is a less likely however prices are likely to remain on tender hooks until we reach an agreement.
Nickel ETP inflows garner momentum for the fourth week in a row as bargain hunters chase falling prices. Nickel prices suffered a sharp decline -3.18% last week with prices nearing a 3-month low on the back of news that the Chinese government is considering reducing incentives for buying electric cars from next year.
Important Information
This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (“ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (the “FCA”).
- Michael Saylor’s bold Bitcoin bet and Strategy’s risk analysis
- Bitcoin price technical analysis: Where are the liquidation levels?
- What are real-world assets and why do we need tokenization?
Michael Saylor’s bold Bitcoin bet and Strategy’s risk analysis
Strategy (formerly MicroStrategy) has amassed a staggering $43 billion in Bitcoin, positioning itself at the forefront of the corporate “reserve race.” Under the leadership of Bitcoin maximalist Michael Saylor, the company now boasts an $84 billion market cap. But with such an aggressive strategy, how sustainable is its approach—and what risks lie ahead? We break it down in today’s analysis.
Bitcoin price technical analysis: Where are the liquidation levels?
A drop below $72,000 could flush longs, while a breakout above $90,000 may squeeze shorts. One key positive indicator is that Bitcoin continues to print higher lows since March 10, which preserves a bullish market structure in our view. Dive into our technical analysis.
What are real-world assets and why do we need tokenization?
Imagine owning a slice of a skyscraper or a piece of fine art with just a few clicks. Tokenization, the act of converting ownership rights to real-world assets (RWAs) into tradable tokens, has surpassed $10 billion in on-chain value, unlocking global 24/7 access to once-exclusive markets with liquidity, efficiency, and yield. Find out how it works.
Research Newsletter
Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com
Disclaimer
The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.
Since President Trump appointed Mark Uyeda as acting SEC chair two months ago, many investigations into crypto businesses have been dropped, as the SEC moves away from regulation by enforcement and works to create a framework for digital assets. As regulations become clearer and news flow turns more positive, crypto prices—which dropped sharply this week—should begin to better reflect the new regulatory landscape in the US.
We believe this regulatory shift could ultimately help trigger the next leg of the current bull run, as investors better understand the significance of regulatory clarity and seek to acquire bitcoin and altcoins at what we believe are currently very favorable levels.
Market Highlights
SEC Dismisses Crypto Enforcement Actions
The SEC dropped its enforcement actions against crypto-related companies Kraken, Consensys, and Cumberland DRW.
This indicates a shift in SEC’s regulatory approach, favoring clearer guidelines over enforcement actions. Such a pivot could foster a more predictable environment, encouraging innovation within the sector.
Banks to Engage in Crypto Activities
The FDIC has rescinded previous guidelines which prevented financial institutions from engaging with crypto activities without prior sign-off.
By removing bureaucratic hurdles, banks may more readily offer crypto-related services, potentially leading to broader adoption and integration of digital assets.
Bitcoin ETFs Inflow Streak Surpassed $1 Billion
US spot Bitcoin ETFs have recorded a 10-day inflow streak exceeding $1 billion marking the longest such streak in 2025.
This underscores growing institutional and retail investor confidence in Bitcoin as an asset class that helps increase market stability and possibly paving the way for the approval of other crypto-based financial products.
Market Metrics
All NCITM constituents had negative performance last week, with XRP (-10.8%) and UNI (-10.7%) seeing the steepest declines. ETH also experienced a sharp drop (-9.1%), contributing to NCITM’s underperformance relative to BTC (-2.9%). The NCITM -4.2% decline reflects a broader risk-off sentiment in the crypto market, as investors reassess their positions amid ongoing macroeconomic uncertainties.
NCITM (-4.2%) extended its underperformance last week, deepening year-to-date losses. Traditional indices like the S&P 500 (-1.5%) and Nasdaq 100 (-2.4%) saw smaller declines. The gap between crypto and other risk assets continues to widen, while gold has emerged as the top performer in 2025, gaining nearly 20% amid ongoing macroeconomic uncertainties. This trend highlights a growing risk-off sentiment, with investors shifting toward defensive assets and away from high-volatility investments.
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