“Gold inflows rose to their highest since February 2013 last week following a 2.4% gain in price. With gold having fallen close to its marginal cost of production (which we estimate at $1100/oz), investors increasingly believe that mine production will be cut in 2015, helping to tighten supply,” said associate director Nitesh Shah.
He added that at the end of this week the Swiss will vote on whether to require their central bank to hold 20% of its assets in gold and if the proposal does pass, he expects a sharp rally in gold. Opinion polls only show 38% of the population is in favour of the proposal however.
Elsewhere in the ETP market, oil ETPs saw the eighth consecutive week of net inflows with a total of $10.8m. Silver ETPs saw a third consecutive week of inflows, copper ETFs had strong inflows, while on the other side of the coin natural gas and soybeans were among the commodities seeing outflows during the month.