Playing the gold card

Gold exchange-traded funds (ETFs) saw explosive growth in 2009, but this year has so far seen net outflows of investor capital. However, with inflation fears and sovereign risk high on investors’ agendas, ETF providers expect interest to pick up once again.

Gold is commonly regarded as a bad news metal, the asset that investors flock to in times of economic uncertainty when plunging stock markets, depreciating currencies and rising inflation combine to make precious metals the ideal portfolio hedge.

While the appeal of gold during times of economic turmoil has long been recognised, the spectacular performance of bullion last year took even some seasoned precious metal veterans by surprise and delighted investors who bought early in 2009.

On January