Precious metals and oil prices continue to show resilience, but other commodities are lagging behind lately. Could this signal more weakness in commodities exchange traded funds (ETFs)?
The iPath Dow Jones-UBS Sugar Total Return Subindex ETN (NYSEArca: SGG) and sugar futures have been falling continuously in consecutive sessions as better supplies coupled with higher sugar quotas pressured sugar prices, according to CommodityOnline. However, improved buying by market participants could help stabilize sugar prices.
The iPath Dow Jones-UBS Cotton Total Return Subindex ETN (NYSEArca: BAL) fell as cotton futures declined to a recent low after China’s cotton imports dropped in March.
Frank Lesh, broker and futures analyst with Future Path Trading, commented that copper prices have traded lower on slowing economic conditions in the U.S., report Chris Kelly and Melani Burton for Reuters. Still, overseas investors piled in on dollar-denominated copper futures as the U.S. dollar depreciated to its lowest level since 2008 – dollar-denominated copper becomes relatively cheaper to foreign investors as the U.S. dollar depreciates, writes Tatyana Shumsky for The Wall Street Journal.
- iPath Dow Jones-UBS Copper Total Return Subindex ETN (NYSEArca: JJC)
- First Trust ISE Global Copper (NasdaqGM: CU)
- Global X Copper Miners ETF (NYSEArca: COPX)
It appears Asia’s demand is driving the rally in grains. Meanwhile, corn, agriculture and grains have continued to rally lately as traders pushed prices higher in the wake of the USDA’s annual planting report. However, that report was delayed as storms in the Midwest delay planting.
- iPath DJ-UBS Grains TR Sub-Idx ETN (NYSEArca: JJG)
- iPath DJ-UBS Agriculture TR Sub-Idx ETN (NYSEArca: JJA)
- UBS E TRACS CMCI Agriculture TR ETN (NYSEArca: UAG)
- PowerShares DB Agriculture Fund (NYSEArca: DBA)
The PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC), which tries to reflect the prices of a basket of commodities, has dipped 0.44% in the past week but it is still up 14.59% year-to-date.
Meanwhile, gold prices touched upon another record high late in the week. Analysts opine that the Federal Reserve’s decision to hold U.S. rates at record lows “for an extended period” helped gold prices as well as crude oil prices, acccording to AFP. Analysts at Commerzbank stated that “the prospect of the highly expansionary monetary course being adhered to brought the dollar under strong pressure, and precious metals were the main beneficiaries.”
- SPDR Gold Shares (NYSEArca: GLD)
- PowerShares DB Precious Metals Fund (NYSEArca: DBP)
- ETFS Physical Precious Metals Basket Shares (NYSEArca: GLTR)
- USCommodity 12 Month Oil (NYSEArca: USL)
For more information on commodities, visit our commodity ETFs category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.