Exchange traded funds (ETFs) closed flat on corporate mergers and higher commodity prices.
- Gold futures edged higher and silver soared 2% Monday as oil prices at 30-month highs stoked fears of inflation and helped fuel investment demand for the precious metals. Gold for June delivery added $4.10, or 0.3%, to $1,433 an ounce. Silver for May delivery climbed 76 cents to settle at $38.49 an ounce, the latest in a string of 31-year highs. The gains in gold and silver “have possibly set the tone for the week, with both metals again rising on safe-haven and inflation hedging after [West Texas Intermediate crude oil recently] touched a fresh 2½-year peak,” analysts at TheBullionDesk said in an overnight note to clients. The iShares Silver Trust ETF (NYSEArca: SLV) closed 1.95% higher on Monday.
- Crude-oil futures traded at their highest in 30 months as tensions in key oil-exporting countries kept investors worried about supply constraints. Light, sweet crude for May delivery added 53 cents, or 0.5%, to $108.47 a barrel. That was oil’s highest settlement since Sept. 22, 2008. Oil lost steam as floor trading began, wavering between small gains and losses as unrest in the Middle East and North Africa provided support, but the higher prices spooked some investors. As conflict in Libya and elsewhere in the region shows no signs of a speedy resolution, prices could hit $110 in short order and $120 by the end of the year, if not sooner, said Bill O’Neill, a principal with Logic Advisors in New Jersey. ProShares Ultra DJ-UBS Crude Oil ETF (NYSEArca: UCO) ended slightly higher today.
- The U.S. dollar fell for a fifth day Monday, touching a five-month low against the Euro, as investors awaited this week’s meetings of key monetary-policy makers. The European Central Bank, the Bank of England and the Reserve Bank of Australia all meet this week, drawing attention to countries that are likely to tighten monetary policy sooner than the U.S. Federal Reserve, making their currencies more attractive than the greenback. Currency markets are beginning “to price in a shift in monetary policy across the” Group of 20, said Boris Schlossberg, director of currency research at GFT. Still, some concerns about whether the ECB would hike more than once — and what effect it would have on the debt-laden peripheral countries — capped the Euro. The PowerShares DB U.S. Dollar Index Bullish ETF (NYSEArca:UUP) closed flat on Monday.
- The major indexes scaled back their gains after the Semiconductor Industry Association reported three-month average chip sales fell 1.1% in February from the prior month. The Nasdaq Composite shed 0.41 point, or 0.01%, to 2789.19, its first drop in five sessions. Shares of Dow component and computer-chip giant Intel Corp. (NYSE: INTC) fell 1.2%. Off the Dow, Nvidia Corp. (NYSE: NVDA), which makes graphics chips, slid 3.7%. The Semiconductor HOLDRs ETF (AMEX: SMH ) was down almost a 1% today.
For disclosure, Tom Lydon’s clients own SLV.
Gregory A. Clay contributed to this article
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