ETF Sector Focus: Energy, Gold ETFs Attract Assets as Prices Rise

  This week on ETF Sector Focus, we look at those funds that are being affected by the unrest in the Middle East and the flight to 'safe" investments, specifically, energy and precious metals ETFs.

According to the fund-research group EPFR Global, investors poured some $1 billion into energy-sector funds during the third week of February. In the five-day period ending Feb. 25, oil-themed ETFs have risen about 8%, while gold ETFs improved roughly 2%.

While gold and oil prices were up for the week, they were somewhat mixed Friday as investors took profits. ETFs tracking these sectors moved accordingly.

As of early Friday, the major U.S. stock markets were trading slightly higher as oil prices stabilized. The major markets were down about 2% for the week as of mid-day trading.

On Friday, WTI crude was down slightly at $96.75 a barrel, while Brent crude moved up a tad to $111.35 a barrel.

The iPath S&P GSCI Crude Oil Total Return Index ETN (OIL) rose 12% through Thursday to trade near $26.70. At noon on Friday, it was up 0.6% to $25.85.

The United States Oil Fund (USO) moved up similarly during the week and traded at $39.25 on Feb. 25.

The iShares Dow Jones U.S. Energy ETF (IYE) ticked up nearly 1% higher on Friday at $44.50. It’s up about 1% for the week as well.

Metals in Motion

Gold for April delivery fell $11.50 to $1,404.30 an ounce early Friday at the New York Mercantile Exchange, but by midday

stabilized at about $1,408. Gold began moving lower on Thursday on news that oil was declining to under $98 a barrel, and gold futures generally were down Friday after reaching seven-week highs on Wednesday.

Gold traded as high as $1,410.40 recently and as low as $1,400.10.  ETFs tracking gold prices were up about 1% on Friday.

For the week, the SPDR Gold Trust (GLD) rose 2% to trade near $137.35, after topping $138 on Wednesday.

The ETFS Physical Gold Shares (SGOL) ended the week at about $140 after hitting $140.80 on Wednesday.

“If countries like China and India continue to grow by 7% to 9% a year, the corresponding rise in incomes should keep the fire of the [gold] love trade burning. In this scenario, gold can continue to slowly appreciate,” said Frank Holmes of U.S. Global Investors in the fund group’s most recent market commentary.