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Financials

Major gold, silver funds see outflows in January

* New York gold, silver ETFs see outflows in January

* Analysts say sustained selling may undermine gold prices

* Platinum, palladium funds see healthy inflows

LONDON, Feb 1 (Reuters) - The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust GLD, said its holdings fell 21.7 tonnes or 1.9 percent in January, against a rise of 63.36 tonnes or 8.1 percent in the same month of 2009.

Data showed the trust, which issues securities backed by physical stocks of gold, held 1,111.922 tonnes of bullion on Friday, the last trading day of January, against 1,133.622 tonnes on Dec. 31.

The SPDR fund saw record inflows in the first quarter of 2009 as fears over the outlook for the financial sector fuelled buying of the metal as a safe haven. The fund is the world’s number six gold holder, ahead of Switzerland, China and Japan.

Analysts fear sustained outflows from gold ETFs if investors’ attitude towards bullion sours, which could prove a drag on prices.

“Gold and silver investment demand has waned since the end of 2009, particularly as the U.S. dollar rebounded versus the euro,” said BNP Paribas analyst Anne-Laure Tremblay. “In this context, most ETFs saw net outflows in January.”

“Going forward, we expect gold to trend lower until the third quarter of 2010, and as a result, net investment demand generally for precious metals -- and therefore inflows into ETFs and exchange traded futures -- should be more subdued than at the same time last year,” she said.

The largest silver-backed fund, the iShares Silver Trust SLV, saw a 107.99-tonne or 1.1 percent decline in its holdings last month, versus a rise of more than 660 tonnes or 9.7 percent in January 2009.

The decline in New York gold and silver ETF holdings has been accompanied by hefty inflows into new platinum and palladium funds launched in January by a U.S. unit of London’s ETF Securities.

Data showed the funds’ platinum holdings had risen to 244,941 ounces by Friday, while its palladium fund held 399,925 ounces of metal. [ID:nLDE6100QM]

“The success of the U.S.-listed platinum group metals ETFs is mopping up supply,” said HSBC analyst Jim Steel in a note.

Exchange-traded funds give investors exposure to an underlying asset price without having to buy and store the asset themselves. They have proved a popular way to invest in physical precious metals.

Reporting by Jan Harvey; Editing by Amanda Cooper

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