DIVERGENCE CONTINUES
The divergence in investor interest between Bitcoin and Ether continues as recent data from SoSoValue revealed that Bitcoin ETFs experienced a substantial influx of $235.2 million – marking the highest inflows since late September, while Ether ETFs saw no movement in capital flow, a rare occurrence that has only happened once before since their listing in July. The disparity in investor sentiment is further highlighted by the total net investments in these ETFs; since their launch in January, Bitcoin ETFs have attracted nearly $18.75 billion in investments, indicating strong market demand. Conversely, Ether ETFs are struggling, with a net deficit of $500 million in investments since their inception in July. This contrast underscores the varying fortunes of Bitcoin and Ether products in the U.S. market, reflecting the distinct preferences and expectations of investors in the cryptocurrency space.
SPARKLING ETFs
According to the World Gold Council (WGC), global physically-backed gold exchange-traded funds (ETFs) continued to attract investments for the fifth straight month in September. North America-listed funds contributed to this growth, with gold ETFs playing a crucial role in meeting investor demand for the precious metal. Notably, the price of gold hit a record high of $2,685.42 per ounce on September 26, benefiting from anticipated U.S. interest rate cuts, and although it experienced previous outflows due to high interest rates, the past five months have seen a turnaround, resulting in a positive year-to-date net flow of $389 million. In September alone, gold ETFs saw inflows of 18.4 metric tons (equivalent to $1.4 billion), pushing total collective holdings to 3,200 tons. Furthermore, it is worth remarking that the rise in gold prices and recent inflows also led to a peak in total assets under management, reaching $270.9 billion by the end of September. Moreover, trading volumes for gold rose, with the over-the-counter market witnessing a 10% increase to $176 billion, and given the surge in gold prices and expectations of future U.S. rate cuts, speculators increased their total net long position on COMEX by 6% to 976 tons by the end of September, marking the highest level since February 2020.
FADING OPTIMISM
Although Chinese stocks had a strong start after a weeklong break, with the onshore benchmark surging 11%, enthusiasm has faded due to a lack of major stimulus. Investors had high hopes for positive news from a key policy meeting but as the National Development and Reform Commission, did not announce new stimulus measures they were left disappointed, and as a result of this, concerns remain about the sustainability of growth. Following this news the CSI 300 Index finished just 5.9% higher, while Hong Kong-listed Chinese shares dropped more than 10%. In addition, market analysts have cautioned against stocks reaching overvalued levels and highlighted risks such as an overheated market and the need for tangible government stimulus.
METALS SHAKEN-UP
Following the disappointment surrounding the lack of additional stimulus measures from China, commodities markets have also experienced a downturn, particularly impacting metal prices. Iron ore, which had previously reached a five-year high of $120 per ton due to expectations of heightened Chinese demand, has now experienced a significant decline to around $100 per ton. Similarly, copper prices have hit a two-week low, falling from $3.50 per pound to $3.30 per pound as investor enthusiasm waned following the absence of anticipated economic support. This shift in market sentiment, with iron ore dropping 20% and copper decreasing by 5.7%, reflects concerns regarding the potential economic impact of the government’s decision not to introduce new measures to boost spending, and as of now, the outlook for these key metals remains clouded.
VOLATILE OIL PRICES
The price of crude oil has dropped by 2% as the market took a break from going up because of concerns over potential conflict between Israel and Iran. Let’s remember that the oil market had been doing well, with prices going up by 13% after Iran attacked Israel with missiles, making people worried Israel might strike back and hurt Iran’s oil industry. However, experts have warned that oil prices can only rise so much without real supply issues. Consequently, as of this morning, the prices for oil like West Texas Intermediate and Brent went down, with gasoline and natural gas prices also changing. Furthermore, the latest news from China’s absence of commitment to boost supply contributed to the downward trend in the oil market.
