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The S&P 500 materials sector index rose +2.12% this week and the Materials Select Sector SPDR ETF (XLB) +1.72%while fears about the banking sector and hopes that the Federal Reserve would halt rate hikes persisted.
Growing market uncertainty, fueled by concerns on Federal Reserve policy and the recent banking crisis, has driven investors toward traditional safety outlets such as gold (HAUUSD: CUR) which almost reached the $2,000/oz level this week.
The precious metal also benefited from the fall in the US dollar and Treasury yields after the Federal Reserve raised interest rates by 25 basis points but indicated it may pause its tightening cycle. May Comex Silver (XAGUSD:CUR) +2.1% at nearly $23/oz.
Copper futures (HG1:COM) also had a good week, rising +4.63% on the back of a weaker dollar. Meanwhile, iron ore futures (SCO:COM) extended their losses and fell -7.20% as the demand outlook is weighed down by the possibility of China reducing its crude steel output by as much as 2.5%.
Gold stocks dominated this week’s top gains among basic materials stocks (market cap $2B or more):
- Gold Fields (GFI) +8.20%
- Chemical and Mining Society of Chile (SQM) +7.16%
- Hecla Mining (HL) +5.35%
- AngloGold Ashanti (AU) +5.15%
- Triple Flag Precious Metals (TFPM) +4.99%
Here are the biggest losers among basic material stocks:
- Scotts Miracle Gro (SMG) -7.97%
- West Fraser Timber (WFG) –6.07%
- OK OK) -5.20%
- National Steel Company (SID) -4.98%
- Braskem (BAK) -4.75%
Other material ETFs to consider: iShares Global Timber & Forestry ETF (WOOD), Materials Select Sector SPDR ETF, Vanguard Materials ETF (VAW), iShares Global Materials ETF (MXI), SPDR S&P Metals and Mining ETF (XME), VanEck Vectors Gold Miners ETF (GDX), iShares MSCI Global Gold Miners ETF (RING), Global X Copper Miners ETF (COPX).
