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Gold and metals funds see $1.1bn outflows

Gold and precious metals funds saw $1.1bn of outflows over the past week, according to Bank of America Merrill Lynch.

This represents the largest flight from precious metals in four months as expectations of a Federal Reserve interest rate rise intensify.

“With a positive outlook for global growth, a rapidly strengthening dollar and hawkish statements from the Fed, investors are seeking returns from other asset classes,” said Nandini Ramakrishnan, global market strategist at JP Morgan Asset Management.

“Perhaps the biggest mover of the market though, came from the People’s Bank of China declaring its current gold holdings were much less than analysts expected,”Ramakrishnan added. “Gold investors can no longer sit in their gilded cages as the price of this asset moves towards record lows.”

Elsewhere in the asset class range bonds saw the largest inflows for three months at $5.5bn.

Equities registered $1.7bn of inflows over the week, bring the total for the past 11 weeks to $51bn, spurred on by continued demand for secular growth sectors of healthcare and technology.

Emerging markets continued to suffer big outflows with $3.3bn of money leaving, meaning $10bn has been pulled over the past fortnight.

In terms of the other broad geographic flows Europe fared best with $6bn of inflows as the first outflows from Japan for two months hit, with $0.5bn being removed.

The United States continued to see total assets invested in the country fall with $3.7bn of outflows across both mutual funds and ETFs being recorded over the week. 

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