By Trevor Hunnicutt
NEW YORK, Sept 7 Turning fortunes for gold
pushed withdrawals from U.S.-based commodity funds to their
highest levels since April, Investment Company Institute data
for the latest week showed on Wednesday.
Investors pulled $601 million from those mutual funds and
exchange-traded funds during the week through Aug. 31, the trade
group said, though many gold funds have seen a rebound in recent
The fickle buying and selling of funds, such as SPDR Gold
Shares, comes after some U.S. monetary policymakers
suggested they favored raising interest rates sooner rather than
later, though weak economic data have damped their case.
Hiking rates would raise the opportunity cost of holding
assets such as gold, which despite its strong price gains this
year yields little.
Precious metals commodities funds tracked by Thomson Reuters
Lipper, a research service, have recorded negative performance
for the four weeks through the end of August.
But the flows have started to rebound alongside of a rise in
the price of gold recently. GLD took in $607 million on Tuesday,
according to FactSet Research Systems Inc, which tracks
the ETF market.
John LaForge, head of real asset strategy at the Wells Fargo
& Co's Investment Institute, said he does not see
concerns over central bank policy or economic problems helping
support gold prices further.
"If you look at gold versus the other major assets, it's
overpriced relative to its history," said LaForge.
It was a fairly quiet end to August for other asset classes.
Stock funds posted $910 million in outflows, ICI data
showed, a more moderate figure than the $3.3 billion in outflows
averaged over the prior five weeks.
Bond funds, which unlike stock funds have been popular for
the better part of the year, took in $2.5 billion, according to
the ICI. That is a slower pace of inflows for the funds,
compared to the $7.5 billion prior five-week average.
The following table shows estimated ICI flows, including
ETFs (all figures in millions of dollars):
8/31 8/24 8/17 8/10 8/3/16
Equity -910 -6,631 -435 3,750 -6,955
-Domestic -127 -4,492 -2,317 3,728 -5,998
-World -783 -2,139 1,882 22 -957
Hybrid 58 -71 234 -58 -106
Bond 2,459 6,393 8,909 9,796 6,438
-Taxable 1,185 4,900 7,107 8,186 4,906
-Municipal 1,274 1,492 1,802 1,610 1,532
Commodity -601 -252 -411 78 913
Total 1,006 -562 8,297 13,566 289
(Reporting by Trevor Hunnicutt; Editing by Alan Crosby)