Last year was the Year of All Things Gold as the safe haven metal supplied investors with a shelter for the market turmoil. But rampant fear in the marketplace has abated, and a bigger risk appetite is the order of the day. That means markets are moving, countries are growing and they’re hunting down the materials they need to get it going:

• Industrial demand for base metals is expected to take off as emerging economies continue to build up. It’s anticipated that the biggest beneficiaries of this will be aluminum, copper, nickel, lead and zinc, reports AAP on The Sydney Morning Herald.

• Commodity Online reports that China and India are expected to be big catalysts for base metals prices, as both economies see more industrial growth this year. [A Guide to Investing in Metals ETFs.]

• The U.S. dollar has been weakening, lending some support to these metal prices. As the dollar weakens, commodities priced in dollars will become cheaper for overseas buyers.

• The world’s supply of copper is concentrated in Chile. Worries about supply have been reinforced by the large earthquake and interruptions in mine production, reports Rebekah Curtis for Reuters. [The State of Aluminum, Copper and Nickel ETFs.]

For more stories about metals, visit our metals and mining category.

• PowerShares DB Base Metals (NYSEArca: DBB)

• Market Vectors Steel (NYSEArca: SLX)

• iPath DJ AIG Nickel ETN (NYSEArca: JJN)

• iPath DJ AIG Copper ETN (NYSEArca: JJD)

China’s Premier Wen Jaibo is keeping the country on an light monetary stance while maintaining an active fiscal policy. The statements turned investors positive on China and reinforced the belief that the juggernaut will continue to be a major consumer of metals, reports Michael Taylor and Rebekah Curtis for Reuters. [A Guide to Metals ETFs.]

China is just one part of the base metals equation, albeit a large one. Let’s take a look at the big picture:

Nickel. The slump in nickel prices has been supplanted by stronger demand and low stock prices since the lows of last March. Price and volume recovery will depend upon patterns changing in both supply and demand in various parts of the world, says Metal Miner. Actual nickel production may  fall behind demand as the stainless steel industry increases usage, reports Anna Stabum for BusinessWeek. [What Influences Metals Prices?]

• iPath DJ AIG Nickel ETN (NYSEArca: JJN)

Aluminum. Overall, the outlook for aluminum is improving, as prices and demand have both waned. The Australian on The Wall Street Journal reports aluminum prices are 55% higher than they were last year at this time.

• iPath DJ-AIG Aluminum ETN (NYSEArca: JJU)

Copper. Copper scrap is now selling at all-time highs as high-grade electrolytic copper wire scrap, which feeds about 40% of world smelters of the metal, tends to become scarce as the Snowpocalypse delays collection, reports Anna Stabum for BusinessWeek.

Chile’s earthquake and numerous aftershocks could keep copper prices higher if transportation and production disruptions continue to be issues.

• iPath DJ-UBS AIG Copper ETN (NYSEArca: JJC)

For more stories about metals, visit our metals and mining category.

An increasing federal deficit coupled with a large decline in the U.S. dollar may eventually translate into rapid inflation and higher metal prices, while the dollar’s recent strength and higher interest rates could mean that precious metals will drop in value, comments Jonathan Bernstein for ETFZone. [Hedge Inflation With These ETFs.]

That’s why investors need to be prepared to act accordingly. Not all metals have a similar reaction to shifting market conditions.

ETFs offer exposure to precious metals such as gold, silver, platinum and palladium, and base metals like copper, nickel and lead. Precious metals are lightly counter-cyclical, affected by interest rates and the dollar, while base metals are highly cyclical, performing well in a strong economy. [4 Factors Influencing Metals ETFs.]

Commodity ETFs come in a variety of incarnations; which you choose is up to you. It depends on the kind of exposure you want, what kind of risk you’re willing to endure and taxes you’re willing to deal with.

Funds can be physically backed by the metal itself, it can have ownership of futures contracts to buy the metal, it can hold companies involved in the mining and production of a metal. [Copper ETN: Forging Ahead?]

A fund that is backed by the physical commodity has the metal stored in a vault. Investors should note that these funds have storage fees calculated into their expense ratios. Also, physical bullion trades are taxed by the IRS at the collectibles rate of 28% instead of the long-term equity rate of 15%. Investors should still consult their tax experts for specific advice, though. [What's Driving Platinum and Palladium ETFs?]

• SPDR Gold Shares (NYSEArca: GLD)
• iShares COMEX Gold Trust (NYSEArca: IAU)
• iShares Silver Trust (NYSEArca: SLV)
• ETFS Physical Gold (NYSEArca: SGOL)
• ETFS Physical Silver (NYSEArca: SIVR)
  
• ETFS Physical Platinum Shares (NYSEArca: PPLT)
• ETFS Physical Palladium Shares (NYSEArca: PALL)

Funds may also own futures contracts to buy the metal. Contracts are rolled over before expiration, and another contract is purchased in its place. Rolling over contracts generates trading fees. Futures contracts are taxed at a lower maximum rate of 23%.

• PowerShares DB Precious Metals Fund ETF (NYSEArca: DBP)
• PowerShares DB Base Metals Fund ETF (NYSEArca: DBB)
• PowerShares DB Gold Fund ETF (NYSEArca: DGL)
• PowerShares DB Silver Fund ETF (NYSEArca: DBS)
• Ultra Gold ETF (NYSEArca: UGL)
  
• ProShares UltraShort Gold (NYSEArca: GLL)
• ProShares Ultra Silver (NYSEArca: AGQ)
• ProShares UltraShort Silver (NYSEArca: ZSL)

Many metals ETFs give investors exposure to the companies that mine and produce the metals. While such funds don’t give you access to spot prices, they have their own advantages. One big one is that mining companies can continue to do well if a commodity’s price steps back, but remains far above the cost of production. Such funds also lack the big day-to-day swings that have a tendency to vex futures- and physically-backed metals ETFs.

• SPDR S&P Metals & Mining (NYSEArca: XME)
• Market Vectors Gold Miners (NYSEArca: GDX)
• Market Vectors Junior Gold Miners (NYSEArca: GDXJ)
• EGS DJ Emerging Markets Metals & Mining Titans (NYSEArca: EMT)

Lastly, funds may offer exposure through notes or exchange traded notes (ETNs). ETNs are taxed by the long-term equity rate of 15%. ETNs are unsecured debt backed by the full faith and credit of the issuer. They have no tracking error. [ETNs: Everything You Want to Know.]

• ELEMENTS Rogers International Commodity Metal ETN (NYSEArca: RJZ)
• E-TRACS UBS Bloomberg CMCI Industrial Metals ETN (NYSEArca: UBM)
• iPath DJ AIG Industrial Metals ETN (NYSEArca: JJM)
• PowerShares DB Base Metals Long ETN (NYSEArca: BDG)
• iPath AIG Copper (NYSEArca: JJC)
• iPath DJ AIG Lead (NYSEArca: LD)
• iPath DJ-AIG Aluminum (NYSEArca: JJU)
• iPath DJ AIG Nickel (NYSEArca: JJN)
• E-TRACS UBS Platinum (NYSEArca: PTM)
• iPath DJ AIG Platinum (NYSEArca: PGM)
  
• PowerShares DB Gold Short ETN (NYSEArca: DGZ)
• E-TRACS UBS Short Platinum ETN (NYSEArca: PTD)
• PowerShares DB Base Metals Double Long ETN (NYSEArca: BDD)
• PowerShares DB Base Metals Double Short ETN (NYSEArca: BOM)
• PowerShares DB Base Metals Short ETN (NYSEArca: BOS)
• PowerShares DB Gold Double Long ETN (NYSEArca: DGP)
  
• PowerShares DB Gold Double Short ETN (NYSEArca: DZZ)

For more information on metals, visit our precious metals category or base metals category.

For full disclosure, Tom Lydon’s clients own shares of XME.

Max Chen contributed to this article.

Some commodities have performed a bit better than others in recent months.  Now that inflation fears have been put on the back burner by the Federal Reserve, will the commodities that outperformed this year resume their uptrends anytime soon, or simply hold steady for the time being? No one knows, so watch the trend lines for signals.

If the prices continue to decline from this point, have an exit strategy in place to protect yourself. We watch for positions to decline 8% off their recent high or below their 200-day moving average.

TraderMark has identified the ten hottest commodities for the year and their corresponding ETFs (although in some cases, be aware that there’s more than one way to play these commodities). Be sure to understand which commodities hold what – some hold physical commodities, some hold futures and others hold the stock of companies involved in their production.

• Unleaded Gas, represented by the United States Gasoline Fund (UGA), up 68.3% year-to-date.
• Copper, which can be accessed through the PowerShares DB Base Metals Fund (DBB), 32.3% year-to-date
• Crude Oil, represented by the PowerShares Dynamic Oil Services (PXJ), up 23.2% year-to-date
• Orange Juice, which can be exposed through the Market Vectors Agribusiness (MOO), up 24.5% year-to-date
• Silver, which is represented by the iShares Silver Trust (SLV), up 23.3% year-to-date
• Sugar, which is seen in the  iPath DJ AIG Sugar (SGG) up 32% year-to-date
• Coffee which can be accessed through the iPath DJ AIG Coffee (JO), up 6.4% year-to-date
• Soybeans, which comprises 25% of the assets of the  PowerShares DB Agriculture (DBA) is down 0.4% year-to-date; exposure to both corn and wheat, two of the nation’s largest commodities can be accessed through DBA as well
• Heating Oil, which can be exposed through the United States Heating Oil Fund (UHN), up 22.2% year-to-date
• Nickel, which is represented through the iPath DJ AIG Nikel (JJN) up 31.5% year-to-date.

For more stories on commodities, visit our commodities category.

Kevin Grewal contributed to this article.

This year, there has been a slump in nickel prices of around 30%, which are blamed on rising prices of oil and the sharp fall in metals prices. Rising costs have forced many plants to halt temporarily or shut down, but these actions do not seem to have any impact on flooring a drop in the price of the metal.

Elisabeth Behrmann for The Wall Street Journal reports that producers of nickel, as well as zinc, are most at risk for becoming uneconomical due to massive price cuts and higher costs. Giant BHP Billiton has shut down a plant in Kalgoorlie, Australia, because falling nickel prices made its operations unprofitable.

While probably most commonly thought of as a component in the coin, nickel has a wide range of uses in building and construction, engineering, electricity and transportation.

• iPath Dow Jones AIG Nickel TR Sub-Index (JJN), down 22.2% year-to-date

Copper, nickel and other base metals surged today as the dollar weakened and oil prices crept back up, report Pratima Desai and Julie Crust for Reuters.

Nickel also rose 7.3% on news that Xstrata was suspending operations at its Falcondo ferronickel mining facility in the Dominican Republic. Nickel is mainly used in the production of stainless steel. One analyst says that because of the news, the market should be brought close to balance instead of being oversupplied.

Copper also shot up 12 cents. It has been slightly depressed this year, falling more than 15% since reaching a record high on July 2. The decrease came after markets started pricing in slow demand growth from China, which is a top consumer of the metal.

Lead ticked up 6.2% at the close on Monday after stockpiles earmarked for withdrawal shot up 11% to their highest level since July 2006, reports Chanyaporn Chanjaroen for Bloomberg. The price of lead has fallen 29% this year.

• iPath DJ AIG Nickel (JJN), down 31% year-to-date
• iPath DJ AIG Copper (JJC), down 9.1% year-to-date
• iPath DJ AIG Lead (LD), down 4.4% year-to-date
• PowerShares DB Base Metals (DBB), down 0.6% year-to-date