$78bn fall in gold assets leads record investor exit from commodities

Data released by Barclays Capital on Tuesday showed that total global commodity asset values fell by a record $88 billion to $332 billion in the first 11 months of the year.

The UK investment bank said $88 billion headline decline in commodity assets under management is the largest on record as is the net $36.3 billion withdrawal of funds from the sector by investors.

Barclays said the overall decline was mainly as a result of price falls and investors abandoning the precious metals sector, particularly gold.

The value of precious metals assets under management fell by $78 billion compared to last year, after a $6 billion of outflows and value declines over just the last month brought total assets to $119 billion.

By comparison base metal assets were largely static over last year and up slightly from the second quarter. Energy assets under management have also remained flat at around $130 billion.

Commodity-backed exchange trader products (commonly referred to as ETPs or ETFs) are now at their lowest level since June 2010 and for gold-backed ETFs the declines are even more startling.

The holdings of the world’s largest gold ETF has dropped some 26 tonnes just this month, falling to the lowest level since January 2009.

SPDR Gold Shares (NYSE: GLD) has experienced year-to-date outflows of 534 tonnes to 816.8 tonnes, down nearly 40% from the start of the year.

The price of gold is down some 26% in 2013 and is set to break its 12-year bull run that took it from around $270 an ounce at the end of 2000 to today's trading level of $1,230 an ounce.

Silver is down 33% since the start of the year to $19.80 from above $30 an ounce at the start of the year.

"We view 2014 as likely to be another difficult year for commodity investors," Barclays said, adding that it expects base metals to outperform oil and precious metals in early 2014, and advocating a bullish position in nickel.