Oil Surge, Gold Miners Sink in Sharp Commodity Rotation

Tuesday’s ETF move was defined by a sharp rotation within commodities: oil-linked funds led decisively, with USO up 5.71% and broad commodities also higher, while precious metals and miners sold off hard as SLV, GLD, and GDX all posted steep declines. In equities, energy extended its three-month leadership with XLE gaining 1.45%, while fixed income was relatively defensive, with only modest weakness across preferreds and long Treasuries.

Gold Miners tanked 6.19%

Equity ETFs

Leaders: Energy XLE +1.45% (3M perf: +18.1%), Semiconductors SMH +0.15% (+19.0%)
Laggards: Gold Miners GDX -6.19% (3M perf: -9.5%), Copper Miners COPX -5.54% (-0.9%)

3M Regime

Strong: South Korea EWY (3M perf: +32.3%), Taiwan EWT (+25.5%), Brazil EWZ (+21.3%)

Weak: Gold Miners GDX (3M perf: -9.5%), Healthcare XLV (-5.7%), China MCHI (-5.7%)

Signals to Monitor

Volatility Compression: Copper Miners COPX, Brazil EWZ, China Large Cap FXI

Overbought: Taiwan EWT, US Technology IYW, Nasdaq 100 QQQ

Preferred Stock slid 0.64%

Fixed Income ETFs

Leaders: Short TIPS VTIP -0.08% (3M perf: +1.4%), Short Corporate VCSH -0.16% (+0.6%)
Laggards: Preferred Stock PFF -0.64% (3M perf: unch.), Long Treasuries TLT -0.55% (+1.0%)

3M Regime

Strong: EM Sovereign Bonds EMB (3M perf: +1.8%), Short TIPS VTIP (+1.4%), TIPS TIP (+1.4%)

Weak: Preferred Stock PFF (3M perf: -0.1%), Global Bonds BNDX (+0.1%), Int. Treasuries IEI (+0.6%)

Oil surged 5.71%

Alternative ETFs

Leaders: Oil USO +5.71% (3M perf: +78.5%), Broad Commodities PDBC +1.75% (+24.9%)
Laggards: Silver SLV -5.07% (3M perf: -19.8%), Gold GLD -2.83% (-1.8%)

3M Regime

Strong: Oil USO (3M perf: +78.5%), Broad Commodities PDBC (+24.9%), Real Estate Sector XLRE (+6.5%)

Weak: Silver SLV (3M perf: -19.8%), Bitcoin Trust IBIT (-16.2%), Gold GLD (-1.8%)

Signals to Monitor

Volatility Compression: Gold GLD, Silver SLV

Romain Gandon — CEO, Quantlake

Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Past performance is not indicative of future results.