Gold finished the week up 2.5% paring losses for the month to -2.3%. For gold as well as with other commodities, it was a story of 2 halves. The first half of the year started off with a bang. As gold, measured in terms of its ETF GLD, was up 18.71%. However, it could only squeeze out a gain of 3.23% in the second half. BHP Billiton, the largest mining company in the world, an excellent barometer for commodities in general told the same story. It was up 28.87% in the first half and down 7.71% in the second half. Oil followed the same first half – second half story. However, it’s second half was so weak that it wiped out all of its gains from the first half. Oil end the year one penny higher than it started the year. So, what was the benefactor of money moving out of commodities – none other than the large cap stocks of the DOW. The DOW added 11.78% in the second half; to its first half gains of 4.04%.
So, what does 2007 have in store for us? I am not sure, but I am sticking with what is working for me. That is commodities and emerging markets.
The Fab Four, from the article “The Commodities Bull Market is Back”, regained its swagger closing up 3.1% for the week. Petrobras led the charge up 4.9% followed by PCU up 3.1%.
Here are the rest of our regulars:
SOX – Semiconductor Index
GLD – Gold Bullion Exchange Traded Fund (ETF)
GDX – Gold Mining Stocks ETF
CEF – Gold and Silver Bullion ETF
USO – Oil ETF
PHO – Water Resources ETF
BRIC – basket of 4 country ETFs: Brazil, Russia, India and China
BBO (Big-Build Out) – basket of 12 stocks critical to the industrialization of BRIC
Refer to the following links for more information on above stocks.