Exchange-traded funds and similar products that track the price of gold saw net outflows of 56 tonnes ($2.5bn) during the first quarter of the year, according to a World Gold Council report The drop in gold price during the first quarter of the year (Q1) has had a mixed response from exchange-traded fund (ETF) investors, with products listed in US and UK markets experiencing net redemptions in Q1 linked to a profit-taking surge. Most other markets experienced net inflows, however, as investors used the lower prices as an opportunity to add to their positions, according to the report. Related articles Japan disaster has broad impact across asset classes Investors debate whether flows to EM debt represent secular shift Sponsored forum: US inflation derivatives The dangers of a more liquid gold market The net outflows were concentrated in January and February, when lower gold prices spurred a wave of profit-taking, leading to a negative demand for ETFs in the first quarter. The report also highlights that the high prices recorded in late 2010 prompted some investors to re-balance their portfolios. Despite the outflows, the collective volume of gold held by global ETFs by the end of the quarter was in excess of 2,100 tonnes, equating to more than $95 billion, according to the report. By contrast, demand for physical bars and coins was up 52% year-on-year, reaching $16.3 billion compared with $8.6 billion in Q1 2010, states the report. Read more: http://www.risk.net/structured-products/news/2072608/-quarter-dip-gold-etfs-world-gold-council#ixzz1MtWg6mnO Risk.net - Financial risk management news and analysis. Take a 1 month free trial to Risk now!

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