Testing the metal

Interest in physically backed exchange-traded gold products boomed last quarter on the back of counterparty risk fears. But the industry is divided on what impact the surge of inflows had on the physical gold market's prices. Could the same effect now be taking place in the smaller platinum and palladium markets? By Sophia Morrell

Since the so-called commodity 'supercycle' began, providers have developed myriad ways to satisfy investor appetite for liquid and accessible exposure to the asset class. Nowhere has this been more evident than in the market for exchange-traded funds (ETFs).

Even the most fastidious of investors are now buying physically backed exchange-traded commodities (ETCs), which have been available since 2003. Rather than using derivatives to provide the exposure, the provider buys physical metal to the