Gold ETP assets nearly halve in 2013

Asset under management in gold exchange-traded products (ETP) almost halved during 2013 as gold prices dived, driving investors out of the asset class.

Since the start of the year, assets in gold ETPs dropped from $147bn to $76bn, a low last seen in April 2010, according to data from ETF Securities. The fall in assets was in part due to the 28% fall in the price of gold over the year, but 54% of the decline was caused by investor outflows. Outflows peaked in the second quarter, when assets plunged by a record $49bn on the back of a strong US dollar, a sharp rise in US real interest rates and reduced demand for gold as an insurance asset. However, investors may have been too quick to dismiss the asset class as a portfolio hedge, ac...