ETF Trends
09-09-2008, 07:10 PM
ETF Trends - Keeping a Grip on Exchange Traded Funds (ETFs)
http://www.etftrends.com/wp-content/uploads/2008/09/gold11.jpgThe rising value of the U.S. dollar is making precious metal exchange traded funds (ETFs) look a little less appealing.
Gold has now slumped to its lowest price in more than a year, following the government’s takeover of Fannie Mae and Freddie Mac, reports Feiwen Rong for Bloomberg (http://www.bloomberg.com/apps/news?pid=20601116&sid=axkUTM_PPxJE&refer=africa).
The dollar index, meanwhile, rose to a one-year high, boosting the PowerShares DB US Dollar Index Bullish (UUP (http://finance.yahoo.com/q?s=uup)). UUP and SPDR Gold Trust (GLD (http://finance.yahoo.com/q?s=gld)) compared:
http://www.etftrends.com/wp-content/uploads/2008/09/z31.png
According to one commodity broker, the markets are torn between investing in gold ahead of the Indian wedding season and those selling gold as a result of the dollar’s strength.
According to ZEAL Speculation and Investment (http://www.zealllc.com/2008/goldseas3.htm), Indian wedding season tends to cause a rally in gold prices in early October through late November. Families of Indian brides give them wedding gold in the form of 22-karat jewelry. India is the world’s largest consumer of gold, much of it in the form of jewelry, and about 40% of India’s gold demand occurs during this wedding season.
Morgan Stanley seems bearish on precious metals, cutting its price forecasts for both gold and silver. Analysts now say gold may average $900 an ounce in 2008 and $950 next year, down from forecasts of $950 this year and $1,000 next year.
Platinum futures have also fallen, to an 18-month low, and palladium stepped back as the dollar hit an 11-month high against the euro, reports Dave McCombs for Bloomberg (http://www.bloomberg.com/apps/news?pid=20601116&sid=avhYW1iPpE2c&refer=africa). Low demand for autos is blamed, because platinum and palladium are used in emissions systems.
Other ETFs affected include:
PowerShares DB Gold Double Short ET (DZZ (http://finance.yahoo.com/q?s=dzz)), up 44.8% since Feb. 28
iShares Silver Trust (SLV (http://finance.yahoo.com/q?s=slv)), down 18.7% year-to-date
iPath DJ AIG Platinum TR Sub-Index ETN (PGM (http://finance.yahoo.com/q?s=pgm)), down 31% since July 8 inception
ELEMENTS MLCX Precious Metals ETN (PMY (http://finance.yahoo.com/q?s=pmy)), down 24.2% since April 4 incpetionhttp://www.etftrends.com/wp-content/uploads/2008/09/z32.png
For full disclosure, some of Tom Lydon’s clients own shares of UUP.
complete story here... (http://feeds.feedburner.com/~r/etftrends-feed/~3/388049851/stronger-dollar-trounces-gold-silver-platinum-etfs.html)
http://www.etftrends.com/wp-content/uploads/2008/09/gold11.jpgThe rising value of the U.S. dollar is making precious metal exchange traded funds (ETFs) look a little less appealing.
Gold has now slumped to its lowest price in more than a year, following the government’s takeover of Fannie Mae and Freddie Mac, reports Feiwen Rong for Bloomberg (http://www.bloomberg.com/apps/news?pid=20601116&sid=axkUTM_PPxJE&refer=africa).
The dollar index, meanwhile, rose to a one-year high, boosting the PowerShares DB US Dollar Index Bullish (UUP (http://finance.yahoo.com/q?s=uup)). UUP and SPDR Gold Trust (GLD (http://finance.yahoo.com/q?s=gld)) compared:
http://www.etftrends.com/wp-content/uploads/2008/09/z31.png
According to one commodity broker, the markets are torn between investing in gold ahead of the Indian wedding season and those selling gold as a result of the dollar’s strength.
According to ZEAL Speculation and Investment (http://www.zealllc.com/2008/goldseas3.htm), Indian wedding season tends to cause a rally in gold prices in early October through late November. Families of Indian brides give them wedding gold in the form of 22-karat jewelry. India is the world’s largest consumer of gold, much of it in the form of jewelry, and about 40% of India’s gold demand occurs during this wedding season.
Morgan Stanley seems bearish on precious metals, cutting its price forecasts for both gold and silver. Analysts now say gold may average $900 an ounce in 2008 and $950 next year, down from forecasts of $950 this year and $1,000 next year.
Platinum futures have also fallen, to an 18-month low, and palladium stepped back as the dollar hit an 11-month high against the euro, reports Dave McCombs for Bloomberg (http://www.bloomberg.com/apps/news?pid=20601116&sid=avhYW1iPpE2c&refer=africa). Low demand for autos is blamed, because platinum and palladium are used in emissions systems.
Other ETFs affected include:
PowerShares DB Gold Double Short ET (DZZ (http://finance.yahoo.com/q?s=dzz)), up 44.8% since Feb. 28
iShares Silver Trust (SLV (http://finance.yahoo.com/q?s=slv)), down 18.7% year-to-date
iPath DJ AIG Platinum TR Sub-Index ETN (PGM (http://finance.yahoo.com/q?s=pgm)), down 31% since July 8 inception
ELEMENTS MLCX Precious Metals ETN (PMY (http://finance.yahoo.com/q?s=pmy)), down 24.2% since April 4 incpetionhttp://www.etftrends.com/wp-content/uploads/2008/09/z32.png
For full disclosure, some of Tom Lydon’s clients own shares of UUP.
complete story here... (http://feeds.feedburner.com/~r/etftrends-feed/~3/388049851/stronger-dollar-trounces-gold-silver-platinum-etfs.html)