Looking to profit in the commodities market? Then make sure you’re being SELECTIVE. Because as today’s MoneyShow Chart of the Week shows, performance varies widely in the asset class. Heck, it varies widely even within subsectors like energy and metals!
Just look at the chart below, which shows the year-to-date returns of ETFs that track gold, silver, copper, crude oil, palladium, and natural gas. At the top of the heap is the iShares Silver Trust (SLV), up 23.8%. Meanwhile, the abrdn Physical Palladium Shares ETF (PALL) is buried at the bottom, with a loss of 13.4%.
Weekly Chart
The rest of the ETFs fall somewhere in the middle, with the SPDR Gold Shares ETF (GLD), United States Copper Index Fund (CPER), and United States Oil Fund (USO) all showing double-digit gains of varying magnitude. The United States Natural Gas Fund (UNG), on the other hand, is down 6.5%.
What’s going on? Unlike in some past periods, where narratives about, say, Chinese economic growth, would drive virtually every commodity higher at the same time, this environment is more nuanced. Supply and demand dynamics vary more widely within the industry, as do the investing cases for different classes of commodities.
For instance, copper is considered more of an Electric Vehicle (EV) and power grid/infrastructure play now. Gold is a play on potentially easier Fed policy going forward. Natural gas is being pushed around by various US government moves, as well as expectations for higher electricity demand from the AI boom (demand that would be met by natural gas-fueled power plants). It’s not as simple as “China is growing faster, so buy everything.”
Bottom line? There are profits to be had in commodities and funds that track them. Just be sure you’re in the RIGHT ones.
Read More: Are There Profits to Take in Commodities and Funds