ETF Outlook for Tuesday, December 3, 2013

ETF Outlook for Tuesday, December 3, 2013

Market Vectors Gold Miners ETF GDX

The price of gold continues to fall as it closed at the lowest level since July. The SPDR Gold ETF GLD finished yesterday down by 2.4 percent as the allure of the precious metal is disappearing quickly.

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The gold miners have been hit even harder as GDX fell to the lowest level in five years yesterday. The ETF is now down 55 percent in 2013 after falling 6 percent yesterday. Investors unwilling to give up on gold as a long-term investment better be hoping for the metal to hold the July lows. A breach of the July lows could send down to the $1,000/ounce level in the coming months.

iShares MSCI Emerging Markets Index ETF EEM

The emerging market stocks have been attempting to rally into the end of the year to salvage one of its worst years of the last decade. Monday was not a good start for the sector as EEM fell 2.1 percent to close at a new two-week low.

Good economic news out of the U.S. could leader to a Fed taper sooner rather than later, which is viewed as a negative for the emerging markets. Other interest rate sensitive sectors also traded lower as interest rates increased.

iShares 20+ Year Treasury Bond ETF TLT

The rise in the interest rates across the board had fixed income ETFs on the defensive on Monday. Strong economic data could put pressure on the Fed to begin tapering sooner rather than later and inevitably pushing bond prices lower and interest rates higher.

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TLT, which is composed of long-date U.S. Treasuries lost 1.1 percent on Monday and is not far from closing at the lowest level since the third quarter of 2011. Keep in mind that a large number of fixed income ETFs traded ex-dividend yesterday, as they always do on the first trading day of the month.

Market Vectors Coal ETF KOL

Late Monday, comments from the EPA hit the wires and helped momentarily push up coal stocks. A member of the EPA said the agency would give states significant flexibility when it comes to meeting the new carbon emission requirements from power plants.

The proposed standards are scheduled to come next June. The coal stocks have been under pressure from an administration that is pushing the green initiative. KOL is down 21 percent this year even though it is well off the August lows.