China’s Buying Spree: A Boon for Commodity ETFs?

Tom Lydon submits: The month of May was not kind to commodities and related exchange traded funds as volatile markets sent investors to safe haven assets. Still, after a significant pullback in commodities, a buying opportunity may be around the corner if global markets return to some semblance of normalcy.

Tom Lydon (ETF Trends) submits: Investors who are interested in commodities may consider trading in straight commodity exchange traded funds [ETFs] or equity-based commodity ETFs. The current market conditions seems to be favoring the equity-based investments for the time being.

Tom Lydon (ETF Trends) submits: What a difference a year makes.

Tom Lydon (ETF Trends) submits: Exchange traded funds (ETFs) tracking precious metals such as platinum and palladium have garnered so much in assets that could eventually attract the regulating eye of the Commodity Futures Trading Commission (CFTC).

Tom Lydon (ETF Trends) submits: It’s a fact: More and more people are consuming goods. As developing nations rise out of poverty, the demand for basic resources will increase and commodities, along with related exchange traded funds, may experience the upward pressure in prices.

By Tom Lydon: Currency exchange traded funds have seen rising investor interest in 2011 but inflows have cooled over the past month as investors worried about global debt jitters pile into precious metals ETFs, particularly gold.

Tom Lydon (ETF Trends) submits: Last year was one long party for metals exchange traded funds [ETFs]. In the wake of China’s monetary tightening announcement, however, you can’t help but wonder if the rally has the legs it needs to keep going.

Tom Lydon (ETF Trends) submits: Investors love commodity exchange traded funds, and with good reason. Aside from the usual benefits that ETFs offer, commodity funds deliver the kind of exposure to commodities that would otherwise be very challenging, very expensive or both.