ETF Securities to launch 5 new precious metals backed ETCs on LSE

ETF Securities to launch 5 new precious metals backed ETCs on LSE

	Published : Thu, 19 Apr 2007 16:37 By : Agencies Print this Story

LONDON (Thomson Financial) - ETF Securities Ltd, which offers investors access to a range of commodities on multiple exchanges, said it will launch five new precious metals backed exchange traded commodities (ETCs) on the London Stock Exchange next Tuesday.

The launch will include a platinum, palladium, silver and gold ETC, as well as an ETC backed by a basket of precious metals, comprising 42 pct gold, 26 pct silver, 20 pct platinum and 12 pct palladium.

ETCs, like exchange traded fund (ETFs), enable investors to trade commodities through ordinary brokerage accounts and can be bought and sold on a regulated exchange in the same way as any equity.

Because ETCs back every ounce of physical metal bought on paper with actual physical stock, their launch often squeezes the market as it eats up the amount of physical stock available.

David Holmes, director of precious metals sales at Dresdner Kleinwort, said the news helped platinum prices hit 1,300 usd an ounce earlier, their highest point since last November when the metal hit an all time peak.

'The tightest market is platinum,' said Holmes, adding the rise in platinum earlier today helped support the other precious metals.

Both palladium and gold edged up after the ETC launch news, but remained below the 11 month highs hit earlier in Asian trading hours.

ETF Securities said demand for ETCs has grown steadily over the last four years and currently stands at over 16 bln usd. It noted its own gold ETC, called Gold Bullion Securities, currently has over 2 bln usd of assets combined.

Platinum and palladium prices have risen steadily this week following an announcement by Zurich Cantonal Bank that it is planning to launch an exchange traded fund (ETF) in both metals.

The world's biggest platinum producer, Angloplat, has said it will not supply physical metal into the fund because it wants to limit supply shortages in the market.

maytaal.angel@thomson.com

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