U.S. equity markets started off the week on a mixed note as most investors stayed on the sidelines waiting for earnings season to begin after the bell. The Dow managed to squeak by with a one point gain although the Nasdaq and S&P 500 declined on the day, both slumping by 0.3%. Commodity indexes had an even more difficult time as energy products declined sharply off their multi-month highs, with WTI Crude tumbling by 3.3% in the session and Brent Crude falling by 2.4%. Gold saw some weakness as well with the yellow metal falling by 0.7% in Monday trading as appeal for the safe haven declined modestly to start the week. This came after the U.S. dollar index rose by roughly 0.3% on the day, helping to push the beaten down greenback back above the $75 mark.
One of the biggest winners in the ETFdb 60 during today’s session was the United States Natural Gas Fund (UNG), which rose by 1.9% in Monday trading. This surge was the first session in positive territory for natural gas in seven days and came amid a three week low for the fuel. Colder-than-normal temperatures helped to boost prices of UNG while some traders bought up the product in a round of bargain buying in hopes that cold temperatures would lead to larger-than-expected drawdowns in the days and weeks ahead. Despite this surge, UNG is down 4.9% over the past week and more than 10% in the past two weeks alone. However, a nice cold snap may just be enough to boost the market to higher levels before the summer cooling season begins across much of the country late next month [see fundamentals of UNG here].
One of the biggest losers in the ETF world was the Market Vectors Gold Miners ETF (GDX), which sank by 2.9% on the day. Today’s losses came as gold tumbled off of its record high, falling by roughly $10/oz. in the day. This was largely due to a dialing down of risk across the globe, which helped to decrease investor demand for this ultimate safe haven. The first piece of news came out late Friday when Congress managed to hammer out a deal to keep the government open, at least in the short term. Many had expected a prolonged shutdown of a variety of Federal services causing gold to tick up late in Friday, but lawmakers managed to find common ground–suggesting that the two parties aren’t as far away from each other as they might seem. Meanwhile, embattled Libyan leader Muammar Qaddafi agreed to accept an African Union peace plan that could lead to a cease-fire, news that also helped to curtail the demand for gold as a hedge against further uncertainty in the region [see holdings of GDX here].
Disclosure: No positions at time of writing.