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Gold, Oil Lead Commodity ETFs Lower


SPDR Gold Shares (GLD) and U.S. Oil Fund (USO) were down more than 1% in early U.S. trading Tuesday as commodity and global equity markets sold off on concerns the Federal Reserve may soon pull back on monetary easing.

In broad commodity ETFs, PowerShares DB Commodity Index Tracking Fund (DBC) slipped 1.2% at the open. [Bear has Growled for These Commodities ETFs]

Stocks, bonds and commodities around the globe were under pressure Tuesday after the Bank of Japan announced no new stimulus measures.

In commodities markets, gold prices fell to the lowest levels in over two weeks one day after S&P lifted its credit outlook for the U.S. Gold futures were back below $1,400 an ounce.

Gold holdings in bullion-backed ETFs fell to the lowest since April 2011 on Monday, Bloomberg reports. However, assets in GLD increased for the first time since May 29.

“The market is coming around to the view that the Fed will taper quantitative easing,” Societe Generale analyst Robin Bhar said in a Reuters report. “The fact that the economy seems to be creating jobs, as we saw with the payrolls report on Friday, makes Fed tapering more likely than not. The Bank of Japan’s reluctance to further stimulate is just another reason to at least be cautious on gold.”

SPDR Gold Shares

Full disclosure: Tom Lydon’s clients own GLD.

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