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The materials sector had a bull run this week, with the S&P 500 materials sector up +3.05% and Materials Select Sector SPDR Fund up +3.13%, benefiting in part from comments from Federal Reserve speakers that has led to a general consensus that the central bank is done hiking rates.
Federal Reserve Chair Jerome Powell said the risks of under- and over-tightening are becoming more balanced, suggesting that the Fed had finished its policy tightening moves and could cut rates early next year.
As a result, Comex gold (XAUUSD:CUR) rallied Friday to their highest-ever settlement and third consecutive weekly gain. Prices of the precious metal were also reacting to to escalating tensions in the Middle East, as the end of the truce between Israel and Hamas could “continue to fuel risk aversion and investors’ concerns,” DHF Capital CEO Bas Kooijman said.
Also boosting bullion’s appeal, benchmark 10-year U.S. Treasury yields slipped to a two-and-a-half month low.
Meanwhile, benchmark three-month copper (HG1:COM) on the London Metal Exchange climbed to their highest levels in three months Friday, following better than expected data from top consumer China and tight supply brought on by the looming shutdown of a major mine in Panama.
This week’s top gainers among basic material stocks ($2B market cap or more) were fueled by gold’s bull run:
Anglogold Ashanti (AU) +15.23% Gold Fields (GFI) +12.18% Eldorado Gold (EGO) +11.18% Chemours (CC) +13.63% B2Gold (BTG) +10%
Here are the top losers among basic material stocks:
Franco-Nevada (FNV) -4.10%; The gold company maintained its full-year guidance despite assuming no further contributions from the suspended Cobre Panama mine. Suzano (SUZ) -3.90% Sasol (SSL) -3.28% CF Industries Holdings (CF) -1.99% West Fraser Timber (WFG) -1.09%
Other materials ETFs to watch: 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).
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