Natural Gas ETF Rebound Continues with 9% Weekly Advance

ETF Trends

The largest exchange traded fund following natural gas futures was the top gainer in ETFs this week with a 9% rally, stirring hopes that the recovery in natural gas prices is real.

Natural Gas . The U.S. Energy Information Administration revealed a smaller-than-expected increase in natural gas inventories, stoking a rally in natural gas futures that have languished near a decade low. [Natural Gas ETF Clears 50-Day Average; First Time Since July 2011]

“All told, yesterday’s report strikes as bullish for the natty contract in the short to medium term,” Stephen Schork, editor of The Schork Report, said in an energy newsletter.

  • United States Natural Gas Fund (UNG - News) : up 9.3% over the last week.

Other top performers of the week include biotech and Treasuries.

Biotech . With ETFs, investors can gain a broad overview of the overall sector.

“I don’t want to be scattershot, covering every company I can. I really want to make sure I understand a field,” Rachel McMinn, the No. 1-ranked biotech analyst, said in a Wall Street Journal article.

McMinn is bullish on the industry’s 2012 prospects and believes that an influx of generalist investors will help boost the overall sector.

  • Market Vectors Biotech ETF (BBH - News) : up 4.2% over the last week.

Treasuries . With concerns of Greece exiting the euro hitting the market, investors found solace in U.S. Treasuries.

“Today there is a flight to safety; Greece is not resolved, Spain is not resolved … and JPMorgan adds a bit of concern simply because they were assumed to be the well-run bank, and if this sort of thing could happen there, where else could it happen?” Lou Brien, market strategist with DRW Trading, said in a Reuters report.

  • Vanguard Extended Dur Treas Idx (EDV - News) : up 2.1% over the last week.

On the downside, cotton, precious metals and miners were the steepest decliners this week.

Cotton . Cotton prices continued to dip Friday, hitting a near two-year low as speculators keep the pressure on. Traders were selling after the U.S. Agriculture Department projected a 2012/13 world cotton ending stocks at a record 73.75 million bales, or up 10% from 2011/12.

“This market’s going to be on the defensive for a long time,” Mike Stevens, an independent cotton analyst, said in a Reuters article.

  • iPath DJ AIG Cotton TR Sub-Idx ETN (BAL - News) : down 10.9% over the last week.

Palladium . Declining to a 5-month low, palladium prices are following precious metals lower as physical demand diminishes. [The Outlook for Palladium, Platinum ETFs]

“After some sizeable price declines, we can’t help thinking that both platinum and palladium look like good value here,” UBS said in a research note. “From the year’s high of $1,737, platinum has already given back $245, while palladium has shed 15 percent from its high of $726.”

  • ETFS Physical Palladium Shares (PALL - News) : down 7.8% over the last week.

Precious Metals Miners . While gold miners experienced some hefty trading volumes on Wednesday, miners continue to follow the drop in precious metals prices. [Gold ETFs See Nearly 4% Weekly Loss, Break Long-Term Trend Line]

  • Market Vectors Junior Gold Miners ETF (GDXJ - News) : down 7.8% over the last week.
  • Global X Silver Miners ETF (SIL - News) : down 7.2% over the last week.

For more information on current market trends, visit our current affairs category.

Max Chen contributed to this article.

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