Global fund flow data suggest that the recent pullback in commodities marks a phase of consolidation rather than a reversal of the broader de-dollarisation trade, according to Elara Capital’s Global Liquidity Tracker.
The correction across commodities over the past week, led by silver, had triggered concerns over the durability of the ongoing rally. “The recent correction across the commodity complex—led primarily by silver—has raised concerns around the durability of the ongoing commodity rally. However, an analysis of fund flows during an otherwise volatile week for commodities (29 Jan–4 Feb) suggests that the broader de-dollarisation trade remains intact,” the report said.
Despite weaker prices, Global Emerging Market (GEM) equity funds attracted inflows of around $5 billion during the week, following a record $11 billion inflow in the previous week. This signals continued confidence in the broader emerging market allocation theme, with no evidence of a large-scale unwinding, as per Elara Capital.
Silver, which had entered an “overstretched zone”, was at the centre of the recent correction.
“Importantly, silver—having entered an overstretched zone—was the epicentre of the correction. Even here, flow data has begun to stabilise, with silver funds seeing $1.5bn of inflows after redemptions of $2.9bn over 3 weeks.”
For India, fund flow momentum appears to have reset to early-cycle levels last seen in January 2023. After six consecutive weeks of redemptions, India-focused funds recorded a marginal inflow of $67 million during the week, offering early signs of stabilisation.
“Broader trend remains fragile and intermittent since late-2024. This week’s inflow into US-domiciled ETFs ($182mn, strongest since Jun’25) helped offset continued selling from Japan-domiciled funds, offering tentative near-term relief,” the report said.
Long-term flow momentum into India had strengthened steadily from January 2023 to June 2024 before turning negative. The subsequent redemptions have effectively unwound that euphoria, bringing momentum back to more neutral levels.
“The redemptions that followed have effectively reset flow momentum back to early-2023 levels, suggesting that one major phase of outflows has played out. From here, the focus shifts to whether flows stabilise or begin to rebuild. At present, Japan remains the weakest source of flows.”
Energy continues to be the strongest pocket within global equity flows. Energy equity funds attracted $4 billion of fresh money in the latest week, marking their largest weekly inflow since September 2008.
“Energy remains an area of strength within global flows. Energy equity funds recorded another $4bn of inflows—largest since Sep’08. While the State Street Energy ETF, dominated by large-cap US energy stocks, is currently trading near a key resistance zone, the strength and persistence of flows suggest increasing odds of a potential breakout,” the report said.