February 22, 2011

Oil, Metals ETFs Rise on Libya Turmoil

The S&P Energy Index is up 9% for the month, while the S&P TSX Canadian Gold Index has ticked up nearly 6%

Energy ETFs increased markedly on Tuesday, along with precious metal ETFs, on news of continuing unrest in Libya.

Crude oil prices for March were rising more than 5% to top $91 a barrel by mid-day Tuesday, as sweet crude for April was up 5%-plus to about $95 a barrel. Gold traded just below $1,400 an ounce.

For the week ending Feb. 18, spot gold closed at $1,385.53 per ounce, up $32.48 per ounce, or 2.39%, reports U.S. Global Investors. Gold equities, as measured by the Philadelphia Gold & Silver Index, improved 4.28%.

The SPDR Gold Trust (GLD) was up 0.7% on Tuesday , trading near $136.36, after rising about 2% in the past five days. The ETFS Physical Gold Shares (SGOL) ticked up 0.75% to trade at $139, with a five-day boost of roughly 2%.

The iShares Silver Trust (SLV) moved up 0.9% at about $32 for a five-day jump of 7%. The ETFS Physical Silver Shares ticked up about 1% to trade at $32.75; this represents a five-day gain of about 7%.

The iPath S&P GSCI Crude Oil Total Return Index ETN (OIL) rose 5.7% Tuesday to trade near $25.25, as the United States Oil Fund (USO) moved up similarly.

The ProShares Ultra DJ-UBS Crude Oil ETF, thought, increased 8.5% to $11.72.

Last week, the S&P Energy Index rose about 4%, while oil futures gained roughly 0.60%, according to U.S. Global. Gold futures moved up 2%, and the S&P/TSX Canadian Gold Index ticked up 5%. The S&P Energy Index is up 9% for the month.

Metals Trends

Ted Whitehead, a senior portfolio manager at Manulife Asset Management, says the bullion price could “reach a record $1,500 an ounce if the U.S. Federal Reserve resorts to more quantitative easing,” noted Frank Holmes, CEO and CIO of U.S. Global Investors, in the group’s Feb. 18 markets report.

Aside from the recent turmoil that’s pushing metals prices higher, “What makes today’s gold market different from the 1970s [is that] back then, today’s emerging market powerhouses, such as China and India, had no global economic impact. Now, these countries aren’t just at the forefront of the gold market, they are global leaders in economic growth,” Holmes explained. 

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