Daily ETF Roundup: UNG, GLD Lead Commodity ETF Surge

by on December 28, 2010 | ETFs Mentioned:

Trading was once again light on Tuesday, as the combination of post-holiday vacations and a massive snowfall in the eastern U.S. kept traders away on a day that lacked any major earnings reports or economic releases. New York Stock Composite trading volume came in at only about 2.2 billion shares, well less than half of the 2010 daily average. Equity markets finished little changed once again, despite a disappointing consumer confidence reading and another decline in the S&P Case-Shiller index. The 20-city index fell 0.8% from a year earlier, sending homebuilder ETFs down on the day.

Commodity markets were once again active on Tuesday, as many resources continued to post gains to close out what has been a very solid year. Gold closed above $1,400 and copper closed at another all-time high, giving a boost to both gold miner ETFs and copper miner ETFs. The dollar was mixed on the day, as commodities gained ground after sliding in the wake of a Chinese interest rate hike that some initially worried would curb the emerging market’s demand for raw materials.

One of the biggest winners on the day was the United States Natural Gas Fund (UNG), which surged 3.6% after a government report  showed that production in the lower 48 states dipped in October for the first time since June. The Energy Department’s EIA-914 report indicated that natural gas output dropped 0.2% from 65.87 billion cubic feet per day to 65.72 bcf/day. “Lower production is giving the market a boost,” said Phil Flynn, an analyst with PFGBest in Chicago. “Gas is caught up in commodity-buying enthusiasm that’s permeated in marketplace.” [see all natural gas ETFs]

Another big winner in Tuesday trading was the Gold SPDR (GLD), which gained 1.6% as the yellow metal climbed above the $1,400 mark. Gold prices got a boost ahead of options expirations on Tuesday afternoon, with some traders buying long lots to balance out upcoming sales obligations. GLD has now gained nearly 30% on the year, though GLD actually owns one of the worst year-to-date performances in the Precious Metals ETFdb Category.

Disclosure: No positions at time of writing.