Investors stuck with gold exchange-traded products (ETPs) in October, but most other commodities ETPs saw outflows as investors remained cautious about the outlook for economic growth.

The gold trend has continued into November as the eurozone crisis has intensified, but oil ETPs have also begun to attract monies as investors eye developments in Iran.

U.S. and European investors put $1,948 million into precious metals ETPs in October according to data from BlackRock, whilst ETF Securities, an issuer of ETPs, put the global figure at $1,492 million.

ETPs include exchange-traded funds, exchange-traded commodities and exchange-traded notes. All trade on a stock exchange, and their value is linked to the underlying assets.

BlackRock said strong gold flows into U.S.-listed ETPs had continued in the first week of November, at about $1.4 billion.

Nicholas Brooks, head of research and investment strategies at ETF Securities, said that investors had been tempted back to gold because of price declines going into October. Spot gold fell from $1,754 an ounce toward the end of September to $1,617 an ounce at the start of October.

That lower price brought a lot of investors back into the gold market - many of our investors said they had been waiting for this price correction to increase their gold allocation, said Brooks.

He added that flows into gold ETPs had remained strong on the ETF Securities platform in November because of ongoing eurozone sovereign debt problems.

Given the continued economic uncertainties and the U.S. monetary policy of keeping short-term rates near zero percent, investor demand for gold is expected to remain strong in the months ahead, said Kevin Feldman, a managing director at BlackRock.

The rest of the commodities complex had net outflows, with the diversified segment losing over $800 million in October. BlackRock said that there had been a big investor shift into equity ETPs last month, with inflows of $21.3 billion.

The shift into equity ETPs was more notable in the U.S., which Feldman said was partly for tax reasons. U.S. investors try to reduce their exposure to equities in mutual funds where they might have had a capital gain as the end of the tax year approaches.

IRAN FEARS

Brooks said that investors had shunned non-precious metals commodities as global growth indicators remained weak in October. Energy ETPs saw net outflows of about $268 million according to ETF Securities and $334 million according to BlackRock's data.

But this trend could be reversed in November following a report from the International Atomic Energy Agency on Iran's nuclear capabilities.

With the increased risk that there may be an attack on those facilities, which would likely disrupt their oil exports, there are growing concerns there may be an oil price spike, Brooks said.

He believes some investors are beginning to position themselves long oil to get ahead of this potential price rise. BlackRock said that about $100 million had flowed into U.S.-listed oil ETPs in the first week of November.

Despite the outflows from the more economically-sensitive commodities, Feldman said BlackRock was beginning to see signs of stabilization. For example, industrial metals had reduced net outflows of some $41 million according to BlackRock data.

Brooks said that supply-side problems were becoming more of an issue in certain metals, with London Metal Exchange copper inventories at 8-month lows, declining stocks in China, and work stoppages affecting production.

The S&P GSCI Industrial Metals index was the second-best performing sector index in October, up 8.92 percent, reflecting these fears.

There is an increasing interest in copper amongst U.S. investors, Brooks said. Those taking a medium- to long-term view believe prices could be at lows where mines may have to be shut, so we are reaching an economic floor for prices.

Three-month copper on the LME dot down to $6,735 a tonne in mid-October. Brooks said the ETF Securities copper product had seen inflows of $7 million in the first week of November.

BlackRock's data covers 752 commodity ETPs worth some $193.2 billion as of end-October. The global figures in the table below combine BlackRock's figures for U.S. and Europe-listed products and exclude other regions.

BlackRock has now recategorized ETPs with exposure to commodity equities such as gold miners and agricultural producers as global equity ETPs rather than including them in the commodities category as before.

Some $26.57 billion was invested in commodity ETPs on the ETF Securities platform at the end of October.

Gold Copper China Investment