ETF News and Views (April 3 to 7, 2023)

Precious metals rally amid weaker dollar

Gold ETFs fared well in March (+8.21%) and continued to rise (+1.57%) through the first week of April. Indeed, we could see the yellow metal soar to new heights this year as a potential Fed pivot weighs on the greenback and Treasury yields after jobs data gave preliminary signs of a cooling economy. This came after the ADP's national employment report on Wednesday showed private payrolls rose by 145,000 in March after rising 261,000 in February.

Furthermore, U.S. job openings slipped to 9.9 million in February, the lowest level since May 2021. The Labor Department also reported Friday that non-farm payrolls grew by 236,000 in March, slightly below market expectations. This reading followed February's print of 326,000, which aligns with weaker factory orders and big negative revisions. Against this backdrop, gold and silver ETFs had inflows of $445 million for the week.

At around $2,015 an ounce, the gold spot price has a bit less than 3% to rise to hit its record high of $2,075 set in 2020. Analysts predict that gold's prospects are set to improve again as investors flock to the safe-haven asset in response to ongoing economic uncertainty.

Oil prices surge after the unexpected OPEC+ output cut

Despite worsening economic prospects, oil prices rose again for the third straight week with industry data showing a fall in U.S. commercial crude oil inventories. They fell by around 3.7 million barrels in the week ended March 31, about 1.5 million barrels more than forecast, according to data released by the Energy Information Administration, suggesting some improvement in demand.

The news of the inventory drawdown came on the back of a surprise cut in oil production by OPEC+ of approximately 1.15 million barrels per day, further fuelling the market rally.

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