Commodity ETFs Heading South, Again, Cheer (SLV, GLD, USO)
May 12, 2011 by Jon C. Ogg
Silver and gold, and oil and other commodities, are heading south all over again this morning. Whether you want to blame reports of higher prices or a slowing of global growth is up to you, but a weaker output in China followed by Shanghai hiking its margin requirements and China has raised reserve requirements a fifth time in 2011 for its member banks in an effort to cut off too many loans.
Silver had been down as much as almost nine percent this morning but the ETF shares of iShares Silver Trust (NYSE: SLV) are down about 4.6% at $32.80 on almost 2.5 million pre-market shares. Keep in mind that the silver ETF was just above $48 only two weeks ago today. Gold was down more than 1% earlier and the SPDR Gold Shares (NYSE: GLD) is down 0.85% at $145.29 this morning.
WTI Crude was down $2.33 at $95.88 earlier and the United States Oil (NYSE: USO) is down 2.9% at $38.20 this morning.
It was just two weeks ago that the market pundits were calling gold, silver, and hard commodities to be the new currency of the world ahead. Milton Friedman once said paper money is worth whatever people think its is worth when it came time to get off the gold standard. Suddenly, paper money is back in vogue. Maybe the U.S. Dollar is not worth what it was, but it hasn’t ever seen a 30% drop in two weeks like we have seen in silver.
JON C. OGG
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