The latest available figures for the holdings in the major gold ETFs show that cumulative daily investment flows over the year netted out at $16.9 billion.  Although we do not have all the figures up to the end of the year, the value of the gold content in the funds was approximately $61.3 billion, a gain of 84% over the year, reflecting an increase of 565 tonnes and a net price rise of $213/ounce.

The change in value of the gold in the funds is not the same as the net daily flows because, of course, the tonnages going in and out of the funds can vary massively on a day-to-day basis.  The net increase in the value of the gold in the funds exceeded the net amount of dollars going into the instruments by some 65%.  The story was similar with the silver funds, which attracted $1.7 billion over the year, while the value of the silver content in the funds increased by $3.6 Bn (to $6.6 Bn), thus outperforming the flows of funds by over 111%.

Platinum and palladium were a slightly different story.  Palladium attracted a net $181 million, while the value of the metal in the funds increased over the year by slightly less, at $177 million, to reach $456 million at year-end.  The platinum fund attracted $452 million, while the value of the metal in the fund increased by $448 million, just about keeping pace with the rate of investment.

Of course these "capitalisation" calculations are not true assessments about whether the funds have proved to be good value to the investor because the sole arbiter of that is the level of the metal price.  It does, however, reflect the fact that some redemptions from the PGM funds, notably platinum, were sizeable, even though they were comparatively few in number.

At the end of this year the platinum funds held just over 21 tonnes (ZKB figures not available beyond 18th December), equivalent to five weeks' global industrial consumption; over the course of 2009 the funds absorbed 12 tonnes, equivalent to roughly three weeks' consumption. 

The equivalent figures for palladium were as follows; end of year holdings; approximately 45 tonnes, equivalent to just over nine weeks' global industrial consumption, while over the course of 2009 the funds absorbed 24 tonnes, equivalent to almost five weeks' global industrial consumption.

The PGM markets have been awaiting the go-ahead or otherwise from the Securities and Exchange Commission for the listing of platinum and palladium Exchange Traded Instruments on the New York Stock Exchange.  While this approval has yet to be granted, the SEC did make a move in mid-December that has raised the markets' hopes for approval and - along with increasing bullishness for the outlook for the world economy and that of Asia in particular - helped to boost palladium over the $400 price level by end-year.  The SEC has placed an order granting approval of the proposed rule change relating to the listing and trading of the ETFS platinum Trust and its palladium equivalent.  This rule changes, which relate to the registration statements for the Funds is "may include: (1) the extent to which conditions in the underlying platinum [ / palladium] market have caused disruptions and/or lack of trading, or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. Pursuant to NYSE Arca Equities Rule 8.201(h), an ETP Holder acting as a registered Market Maker in the Shares is required to provide the Exchange with information relating to its trading in platinum [ / palladium], related futures or options on futures, or any other related derivatives, which the Market Maker may have or over which it may exercise investment discretion".

Although the SEC has made no further comment, a good part of the market is taking this as a precursor to the full approval of the listing. 

The existing ETFs are widely accepted to have helped to boost the price of both platinum and palladium as they have expanded the investment constituency of the metals, but the markets have remained orderly and low lease rates suggest that liquidity is plentiful.  The platinum market is expected to be in surplus in the foreseeable future, prior to ETF investment, and while palladium is expected to be in a global deficit, its existing inventory levels are high. 

There should therefore be room in the markets for these instruments and US investors are expected to greet them with interest, if not enthusiasm.  The fact that speculative long positions on NYMEX have recently been at all-time highs is a further illustration of the interest in the market, although speculators and ETF investors tend in the main (but not exclusively) to be different animals.