Investors allocate to gold amid rising Ukraine tensions

Gold bars 1ETF Securities says its long gold exchange-traded products (ETPs) saw inflows for the fifth consecutive week during the week ending August 17, adding that investors are allocating to

gold amid rising tensions between Russia and the Ukraine.

Its physical gold ETPs saw $75.5 million (€56.4 million) of inflows last week, despite the price only gaining 0.6% in the past month. This brings the four-week total to $282.6 million, the highest since August 2012.

Long oil ETPs have also attracted investors, reaching their highest inflows in eight weeks at $41.7 million, a result of falling oil prices and sustained high political risk in the Middle East.

In a report, Nitesh Shah, associate director, and Nicholas Brooks, head of research and investment strategy, say: "The conflicts in Ukraine, Iraq, Syria and Libya combined with the returning debt problems in Argentina and lacklustre growth in Europe appear to be causing investors to re-assess (or at least hedge) their risky asset allocations."

They also found that inflows into ETF Securities' Daily Leveraged Silver reached a 12-week high. Investors bought $5 million of leveraged exposure to silver as the price dipped 1% last week and 6% over the month.

ETF Securities is an independent exchange-traded product provider, which, at the end of June, managed $19.7 billion of global investor assets.

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