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Gold in Demand as Global Risks Linger
Commodity ETP Weekly Gold in Demand as Global Risks Linger
Highlights
Global risks drive US$435mn of inflows into long gold and oil ETPs.
Arabica coffee remains in focus on low crop expectations.
Price correction prompts US$6.3mn of inflows into ETFS Copper (COPA)
Gold ETPs saw the largest inflows since August 2012 last week, as lingering global risks lifted demand for safe havens. Fears of a further slump in the euro following the ECB quantitative easing announcement last week, and Greece once again threatening the Eurozone’s unity alongside continued geopolitical risks, are likely to continue to buoy gold prices and lift demand for alternative stores of value.
Global risks drive US$435mn of inflows into long gold and oil ETPs. Although the announcement of quantitative easing (QE) by the European Central Bank (ECB) was widely anticipated, the overall size was larger than expected. At EUR60bn a month until September 2016, the ECB will purchase more than a EUR1trn over the course of the programme. The ECB clearly wants the Euro area to move out of a deflationary mind-set. Fear of a further slump in the Euro as the ECB’s looks to boost its balance sheet buoyed the gold price and prompted US$294mn of inflows into our long gold ETPs. Safe havens are likely to remain in demand this week after the Syriza party won the Greek election yesterday, raising prospects that the country will seek to renegotiate the terms of its international bailout. At the same time, oil prices trended higher on Friday as news of Saudi King Abdullah’s death added to uncertainty in energy markets. While prices might remain weak for some time, inflows into long oil ETPs have totalled over US$572mn since the beginning of the year, showing investors are becoming increasingly confident in a price rebound.
Arabica coffee remains in focus on low crop expectations
Long coffee ETPs saw US$4mn of inflows last week as CONAB, the Brazilian forecasting authority, revised down its forecasts for the 2015/16 crop. Brazil is the biggest producer of Arabica coffee with 45% of global production. The development of the coffee trees in the country has been disappointing so far following extreme drought conditions last year. Although rainfall in November had eased the situation somewhat, since then the weather has turned dry again. This could result in a substantially lower crop this year and could prompt a price rally.
Price correction prompts US$6.3mn of inflows into ETFS Copper (COPA). Strong back-to-back weekly inflows into long copper ETPs highlights that investors deem the recent price slump excessive. China’s latest statistics showed that the country grew more than expected in 2014, at 7.4%, easing fears of a hard landing. Although China is turning its focus from construction and export dependent manufacturing to domestic consumption, demand for copper has remained strong in 2014, with imports rising for the 5th consecutive month in November. While low energy prices have dragged down metal prices by reducing their cost of production, we think negative sentiment, rather than weak fundamentals, is weighing on the copper price at the moment.
Key events to watch this week. This week Europe will remain in focus, as the new Greek government seeks to renegotiate the terms of its bailout that is set to expire at the end of February. After the BOC and the ECB surprised markets by cutting rates and announcing a full-blown QE programme respectively, the FOMC meeting on Wednesday will be closely monitored by investors for any signs of a delay in tightening by the Fed. Gold would likely benefit from the Fed highlighting any potential spill-over effect on the US economy from weak oil prices and global risks.
Video Presentation
Simona Gambarini, Research Analyst at ETF Securities provides an analysis of last week’s performance, flow and trading activity in commodity exchange traded products and a look at the week ahead.
Important Information
This communication has been provided by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority.
- 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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