Commodity ETFs Rise on price of Gold, Silver, Natural Gas

Joel Anderson  |

Monday saw a jump in value for those ETFs tracking several different commodities as natural gas, gold, and silver all experienced major jumps in price. The price of gold gained about 1.15 percent, silver jumped over 2.5 percent, and natural gas gained almost 4 percent. And this pushed the major ETFs tracking these commodities higher.

Natural Gas ETFs Rise with Forecasted Temperatures

Behind the boost in the price of natural gas was weather forecasts from MDA Weather Services that predicted higher temperatures through October 21st. Hotter weather typically means greater demand for natural gas as more people and businesses use air conditioning to beat the heat. There’s also some pressure on the supply side as the U.S. Bureau of Safety and Environment reported that Tropical Storm Karen had put 48 percent of American natural gas production in the Gulf of Mexico on hold as of October 6th.

“Temperatures have been above normal, which is supportive for gas demand,” said senior market analyst at Price Futures Group Phil Flynn. “Traders are still pricing in some of the production lost because of the storm.”

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The United States Natural Gas Fund (UNG) gained almost 3 percent as a result. The iPath Dow Jones UBS Natural Gas Subindeex Total Return (GAZ) was up almost 1.5 percent, the United States 12 Month Natural Gas Fund (UNL) jumped almost 2.75 percent, and the Teucrium Natural Gas Fund (NAGS) rose almost 2.5 percent.

Gold, Silver ETFs Pop as Well

Joining the hard-charging natural gas ETFs were ETFs tracking precious metals as gold and silver rose on increased demand. With the threat of government default only 10 days away, many investors could be returning to gold and silver as safe havens. This comes off several days of dropping gold prices that were believed to be connected to traders moving to a risk-off environment. Silver also appeared to be bolstered by better-than-expected industrial demand.

The SPDR Gold Trust ($GLD) gained almost 0.85 percent, the iShares Gold Trust ($IAU) jumped just over 0.85 percent, and the PowerShares DB Gold Fund ($DGL) gained over 1 percent. Among silver ETFs, the iShares Silver Trust ($SLV) jumped over 2.5 percent, the ETFS Silver Trust ($SIVR) jumped almost 3 percent, and the PowerShares DB Silver Fund ($DBS) popped almost 3.25 percent. The two metals price hikes combined to push the PowerShares DB Precious Metals ETF ($DBP) up over 1.5 percent.

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