Silver and Gold ETFs top the pack
24.07.2008
Amid a general ongoing slide in just about anything to do with commodity valuations, gold and silver exchange traded funds/commodities rise to the top of the pack.
JOHANNESBURG -
Over the past two months, the world's top 20 listed mining stocks have surrendered just under USD 500bn in value as investors increasingly fret over the rate of slowdown in the global economy.
Over the same period the global top 20 oil stocks have lost just under USD 800bn in value, much of it over the past week, after Ben Bernanke, chairman of the Federal Reserve, the US central bank, last Tuesday warned of a "cooling" period ahead for commodity prices. Oil prices slid nearly USD 10 a barrel on the news; a week later, this Tuesday, the oil price slid by nearly another USD 10 a barrel, to well below USD 130.
Just a week ago it seemed to be a foregone conclusion that the price would make a successful attack on the USD 150 a barrel level for the first time. The sell-off of physical commodities has spread like a contagion into most spot and future markets, and even into commodity indices - such as the Reuters/Jeffries CRB, now 11% off its highs - and also into exchange traded funds (ETFs), which specialise as commodity proxies, and are also known as exchange traded commodities (ETCs).
At this stage, gold ETFs have risen to the top of the performance pack, in terms of percentage falls from high prices. The world's biggest gold ETF, the SPDR Gold Trust, currently holding USD 22bn worth of gold bullion on behalf of its investors, is just 6% off its all time high. The world's biggest diversified resources stock, BHP Billiton, has fallen 26% from its highs, seen in May.
Measured over the past 12 months, however, the returns from silver bullion ETFs outrank their gold peers. Gold and silver bullion have a well documented history of performing as high beta plays during times of crisis. The two metals scored record prices earlier this year in March, when Wall Street's Bear Stearns crisis was at its most perplexing stage.
While gold and silver bullion prices currently remain shy of peaks seen in March, gold and silver ETFs currently rank right at the top of global securities performance on the basis of "safe haven" appeal. The wall of worries includes intensifying jitters in stock and bond markets, not least nerves over the valuation of listed mining and oil stocks, where valuations are increasingly undermined by rising inflation fears, along with cooling conditions in the global economy. Listed gold and silver stocks are now increasingly lagging the price performance of gold and silver ETFs.
GLOBAL LISTED RESOURCES STOCKS
Composite weighted 12-month net price gains
| |
|
|
IMC
USD bn |
Stock
sample |
| 1. |
potash |
195.2 |
200 |
12 |
| 2. |
Silver ETFs |
47.9 |
4 |
2 |
| 3. |
Gold ETFs |
39.1 |
30 |
9 |
| 4. |
Iron ore |
36.7 |
300 |
78 |
| 5. |
Mining najors |
32.2 |
1214 |
20 |
| 6. |
Gold |
29.2% |
220 |
88 |
| 7. |
Aliminium |
20.9% |
100 |
12 |
| 8. |
Coal |
17.6% |
476 |
122 |
| 9. |
Tin |
5.0% |
4 |
13 |
| 10. |
Oil |
1.1% |
2666 |
44 |
| 11. |
Oil sands |
-1.1% |
59 |
15 |
| 12. |
Platinum |
-3.6% |
83 |
58 |
| 13. |
Copper |
-5.7% |
163 |
57 |
| 14. |
Silver |
-6.5% |
25 |
50 |
| 15. |
Uranium |
-13.2% |
56 |
106 |
| 16 |
Molybdenum |
-14.5% |
16 |
18 |
| 17. |
Nickel |
-23.7% |
33 |
19 |
| 18. |
Zinc |
-29.1% |
30 |
12 |
| 19. |
Diamonds |
-31.0% |
12 |
22 |
| |
Totals |
|
4476 |
757 |
| |
|
|
|
|
|
Source: mineweb.net
|
