Have we entered a bizarro exchange traded fund (ETF) world?
First, financials and internet are staging a turnaround for the better. Now commodities are turning lower after being on a bull run in recent months. The shift owes much to the Federal Reserve’s latest interest rate cut – it’s spurred investors to take some money out of commodities and ever-so-cautiously put some back into equities.
As a result, gold has fallen by its largest amount since June 2006, report Pham-Duy Nguyen and Millie Munshi for Bloomberg. The price dropped to $946.20, after hitting a record $1,033.90 on March 17. Declines were also seen in silver, sugar, wheat and oil.
The price of oil, which had been posting new records every day recently, suddenly dipped lower after demand for both oil and gas weakened, reports John Wilen for the Associated Press. Prices at the pump stepped back for the third straight day (insert a sigh of relief here).
Investors had been wondering when this would happen, since the rising prices didn’t reflect the reality that supplies were increasing and demand was dropping off.
That being said, prices are still stratospheric: oil was $104.96 a barrel, while the national average for a gallon of gas was $3.27. Analysts are still saying the price could go anywhere from $3.50 to $4 a gallon by spring.