The market switched to cautious mode last week ahead of the FOMC meeting. Risk appetite diminished as investors concerned Fed's QE measures may be smaller than previously expected. In the week ended October 29, holdings in gold and silver ETFs dropped as investors took profits from previous long positions. Meanwhile, moderations in inflows were seen in both platinum and palladium ETFs. While precious metal prices may drop, we expect any correction will be short-lived. As the dollar is doomed to be pressured in the long-term, gold and other precious metal's uptrend should remain intact.

Gold: Out of the 10 ETFs we track, 4 recorded declines in holdings while 4 recorded gains. SPDR Gold Trust dropped -166.05K oz, or -0.4%, to 41.57M oz while declines in Julius Baer Physical Gold Fund accelerated. The fund lost -100K oz, or -3.6%, to 2.67M oz, following a -1.03% drop in the prior week. Holdings in Gold Bullion Securities and ZKB Gold ETF slipped -37.32K oz and -3.02K oz to 4.00Moz, and 5.91M oz respectively. ETFs reporting inflows during the week include ETFS (London), iShares Comes Gold Trust, ETFS (London), New Gold Fund and ETFS (Australia). Net inflows fell -259.43K oz, or -0.39%, to 66.08M oz during the week.

Silver: 3 out of the ETFs under our coverage recorded outflows during the week. iShares Silver Trust, the largest silver ETF, lost -2.64M oz, or -0.80%, to 326.07M oz, Julius Baer Physical Silver Fund dropped -1.24M oz, or -12.17%, to 8.98M oz and ETFS (London) slipped -275.50K oz, or -0.93% to 29.39M oz. The declines were partly offset by inflows to ETFS (US) and ETFS (Australia). Net outflows during the week were -3.95M oz.

Platinum: Only 2 ETFs showed changes last week. ETFS (London) gained +3.69K oz, or +1.00%, to 371.05K oz while ZKB Platinum ETF added +1.58K oz, or +0.5%, to 315.16K oz. These resulted in net inflows of +5.27K oz, or +0.50%, to 1.05M oz for platinum ETFs.

Palladium: Buying also moderated in palladium ETFs with gains only seen in ETFS (London) and ETFS (Australia). Net inflows were +5.94K oz, or +0.32%, to 1.89M oz.