As gold, platinum prices fall, investors flee precious metal funds

Neelabh Chaturvedi
A man advertises for a jewelry store that buys gold in Manhattan in New York City.
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Here's another sign that investors are getting tetchy about the performance of precious metals such as gold.

According to Bank of America Merrill Lynch's weekly flows report, investors yanked $1 billion from precious metals funds in the week to Nov. 25, the chunkiest outflow in 17 weeks. Data this week were based on four days of fund flows as opposed to the normal five due to Thanksgiving holiday, the bank said.

Precious metal funds typically focus investments in companies that mine, explore or deal in gold and other metals such as silver and platinum, the prices of which have been under the cosh recently.

Gold is currently trading at $1,072 an ounce, near its lowest level since February 2010. Platinum, meanwhile, is close to a seven-year trough at $852 an ounce.

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Investment-grade bond funds saw outflows of $2.6 billion, the heftiest in eight weeks, while investors piled into money market funds, as shown by $12 billion of inflows.

Emerging markets continued to be unloved as well. More money has fled emerging markets equity funds than has entered for the past four weeks, while bond funds have seen outflows in 17 of the past 18 weeks, the data showed.

Equities in general had net inflows, although there was divergence between exchange traded funds, which had inflows of $7.3 billion, and actively-managed mutual funds, which suffered $6.8 billion of outflows.