Van Eck Global, the asset manager behind the Market Vectors range of exchange-traded funds, has released the February edition of the firm’s Gold Market Commentary. The paper, which investigates the key factors driving price changes in the yellow metal, shows that from a technical perspective gold has clearly broken free of a downtrend that began to establish itself in early 2013. Joe Foster, Portfolio Manager at Van Eck, examines the arguments in favour of further increases in the gold price during 2016.

Investors put their money into safe-haven assets in February amid fears over another recession, according to BlackRock’s latest landscape report. Research from the asset manager showed that the global exchange traded product industry gathered $9.4bn over last month, with the majority of flows going into US treasuries and gold-based ETPs, at $5.7bn and $7.2bn, respectively. However, total inflows were offset by investors pulling out of US and European equity ETPs to the tune of $8.8bn and $4.2bn.

Index provider Markit has released a report showing that assets under management (AUM) in fixed income exchange traded funds are increasing as a percentage of total AUM. The report, which investigates flows into ETFs across a range of asset classes, found that ETF providers capitalised on the trend by dedicating a greater proportion of fund launches with fixed income exposure. The report notes that global AUM for ETFs has risen by $130bn since the start of the year to 7 March 2016, driven by $35bn in net gatherings with the balance derived from price moves in underlying asset values.

iShares has resumed the creation of new shares in its iShares Gold ETF (NYSE: IAU) following a temporary suspension on 4 March 2016 due to an exhaustion of registered shares at that point. The trust behind the ETF has since successfully registered new shares with the Securities & Exchange Commission to accommodate future creations in the primary market. Despite the halting of creation activity, trading remained orderly during the suspension period – investors were still able to transact in the ETF on stock exchanges and authorized participants were able to continue to redeem shares during the suspension, though none requested to do so.

Global exchange-traded fund provider iShares has suspended the creation of new shares in its iShares Gold ETF (NYSE Arca: IAU) after a surge in investor demand caused a temporary exhaustion of shares currently registered with the US Securities & Exchange Commission. The ETF, which experienced a larger amount of creation activity during February than it has in any one month over the last decade, saw its assets expand by $1.4bn year-to-date, bringing total AUM above $7.7bn (as of 4 March 2016). Investors have turned to safe-haven assets, such as gold amid heightened market volatility across global equities since the beginning of the year.

Assets in the exchange traded funds industry saw their run of inflows come to an end after 23 months. Total assets under management (AUM) in the global ETF industry fell month-on-month for the first time in January since January 2014, according to data from Cerulli Associates, a global analytics firm. The February 2016 issue of The Cerulli Edge – US Monthly Product Trends Edition – reported that net outflows of $1.8bn, combined with poor market returns, resulted in a 4.7% drop in global ETF assets during January.

Gold exchange-traded products are continuing to enjoy a revival as investors flock to safe-haven assets amid volatile equity markets. Europe’s leading provider of gold ETPs, ETF Securities, has reported the seventh consecutive week of inflows into its gold-linked ETPs, which include the $4.3 billion ETFS Physical Gold (PHAU) and the $3.5 billion Gold Bullion Securities (GBS). James Butterfill, ETF Securities’ Head of Research & Investment Strategy, said: “Investors are buying into gold as an insurance asset – a hedge against what were seen as tail-risks which are now emerging. Fears over anti-establishment governments strengthening or a dislocation in financial markets are some of the concerns on investors’ minds.”

Following the recent launch of its S&P Real Assets Index, S&P Dow Jones has issued a report examining the potential benefits of allocating to real assets. The report, entitled “Let’s Get Real About Indexing Real Assets” and authored by Jodie Gunzberg, Global Head of Commodities & Real Assets at S&P Dow Jones, highlights how real assets offer an effective means of reducing risk, enhancing diversification and achieving inflation protection. Unveiled on 31 December 2015, the S&P Real Assets Index measures the performance of real assets including global property, infrastructure, commodities, and inflation-linked bonds by using liquid and investable component indices that track public equities, fixed income, and futures. By using liquid and investable component indices, the index is suitable for use as an underlying reference for exchange-traded funds.

As El Niño fades, La Niña weather conditions look increasingly likely to emerge later in the year, according to research from exchange-traded products issuer ETF Securities. The London-based commodities specialist notes that La Niñas that reach a “medium” strength by northern hemisphere winter tend to help the production of grains, coffee and cocoa and so a La Niña starting in winter 2016/17 could be price negative. Nitesh Shah, Director & Commodities Strategist at ETF Securities, said: “Looking at the crop cycle and weather impacts at different times of the year in various geographies, we believe there is a logical reason why prices should rise or fall in a winter La Niña. We believe that if a winter La Niña 2016 is confirmed, there is good reason to short wheat, corn, soybeans, coffee and cocoa and go long sugar.

Source, a leading European provider of exchange-traded products, has reported record levels of demand for its physical gold ETP, the Source Physical Gold P-ETC (SGLD LN), in January. The product attracted $300m of inflows over the month, bringing total assets under management to over $2bn. Christopher Mellor, Executive Director, Equities Product Management at Source, commented: “Given the challenging start to 2016 and nervousness in the markets, there is clearly a renaissance in gold as a haven. We have seen record demand for our gold product, with investors attracted to its very low cost and high liquidity.”