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March 16, 2012 at 08:44 AM
The strong showing of the major U.S. stock indexes this week and over the past three months has seen a corresponding drop in the prices of major metals. And, in the short term, at least, experts say that major metals are not poised for a reversal.
Prices of the SPDR Gold Trust ETF (GLD), for instance, and the iShares Silver Trust (SLV) are down 2-4% this week, while the Dow Jones and S&P 500 indexes have risen at a 2-4% clip.
Over the past three months, these key metal-focused ETFs have been in positive territory, but have fallen sharply from their late February highs. Meanwhile, the major stock indexes have moved up over 10%, and the Nasdaq has improved roughly 20%.
Are metals expected to catch up? Based on trends in China tracked by Standard Chartered Bank, demand is looking soft, analysts said earlier this week. Plus, large money managers have cut their gold positions.
Gold prices have lost more than half of this year’s gains due to speculation that improving U.S. economic data will discourage the Federal Reserve from buying more debt.
