Outlook for gold and silver ETCs positive, finds GPF

Feb 10th, 2021 | By | Category: Commodities

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An overwhelming majority of institutional investors and wealth managers are optimistic about the outlook for gold and silver in 2021, according to a survey conducted by the Global Palladium Fund.

Outlook for gold and silver ETCs positive, finds GPF study

Alexander Stoyanov, CEO of GPF; Timothy Harvey, CEO of NTree.

According to GPF, which recently made its debut as an ETC issuer, four in five investors expect the price of gold to rise this year, with roughly 40% anticipating a gain of at least 5%. Only 5% of investors surveyed thought the price of gold would decline.

Investors are similarly optimistic about silver, although to a slightly lesser extent. One-third of the investors surveyed thought the price of silver would strengthen by at least 5% during the year.

Respondents agreed that any surge in industrial activity later this year as the global economy starts to emerge from the pandemic would be very constructive for silver, especially given its growing role in renewable energy production.

The main reasons cited by investors for an increase in the price of gold were global geopolitical risks, in particular ongoing tensions between the US and China, and the growing threat of inflation.

Almost all investors surveyed (97%) agreed with the view that gold’s importance could increase as some countries look for alternatives to the US dollar to settle international trade. Gold could increasingly fulfil this role as it is seen by many as ‘apolitical’ money as it is not issued by any central bank.

Commenting on the findings, Alexander Stoyanov, Chief Executive Officer of GPF, said: “Our research reveals that many institutional investors and wealth managers have a positive outlook on both gold and silver this year. There is still much uncertainty in the world, and this leads to increased market volatility, which can make precious metals more appealing to investors as they look to diversify their portfolios.”

Precious metal ETCs

GPF, which is backed by Russian mining giant Nornickel, recently listed four physical metal ETCs in Europe, including gold and silver products.

Aimed at professional investors, the GPF Physical Gold ETC (0IIA GYTGLD LN) and GPF Physical Silver ETC (0IIB GYTSLV LN) have listed on Xetra and LSE and come with among the lowest fees anywhere in Europe, charging just 14.5 and 20 basis points respectively.

The ETCs have been endowed with a strong focus on ESG and are understood to be the first to record bar information using distributed ledger technology. The use of this technology is in addition to the traditional recording processes used by the custodian.

London-based NTree International is leading marketing and distribution efforts for the ETCs.

NTree’s CEO and founder Timothy Harvey said: “Over $50 billion of new funds was allocated to precious metal ETPs last year, which was more than double than in 2019. Our research shows many investors are optimistic about the price of gold and silver this year, so it is a very opportune time to launch new metal ETCs that have the lowest charges in the marketplace, a firm commitment to ensuring the metals are mined ethically, and the highest possible standards when it comes to security and transparency.”

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