ETF Update: Gold Staging a Turnaround, Financials Stumble

Gold futures and ETFs began to stage a turnaround in trading yesterday after the dollar once again fell and oil futures hit new records.

Gold yesterday rose to $870.70, reports Bob Ewing for Digital Journal. Meanwhile, the dollar stepped back from its growth spurt, falling against the euro, and oil hit a record $120.01 a barrel, John Wilen for the Associated Press reports.

That sent investors once again scurrying for cover.

The gold-focused ETFs, streetTRACK Gold Shares (GLD) and iShares COMEX Gold Trust (IAU), surged higher after a difficult stretch a few days ago. They both closed on Friday down 3.1% for the week. iShares Silver Trust (SLV) was trading higher today, too. All three funds rose 2% at the end of trading today.

Last week, the situation looked a little different. Gold for June delivery closed on Friday at $858 an ounce. The U.S. dollar jumped after news of the U.S. labor market was not too shabby, as expected for April, report Polya Lesova and Mayra P. Saefong on MarketWatch.

As prices fell, the questions began: has the commodities bubble burst? Much like gold, wheat, rice, and silver were also on losing streaks. There was a slight rebound Friday as some of the losses appealed to bargain hunters, but are the commodities-as-a-safe haven thoughts in the past?

Where it goes next is anybody's guess.

Financial ETFs, Markets Stumble After Buyout Deal Rumored to Be Failing

Financial stocks and ETFs fell yesterday after investors became worried that Bank of America (BAC) might not complete a proposed buyout of Countrywide Financial (CFC).

A brokerage said Bank of America was either going to renegotiate the deal or walk away from it altogether, reports Jennifer Coogan for Reuters. The news kicked the market while it was already down from the failed Yahoo (YHOO)/Microsoft (MSFT) deal.

On the upside, the service sector defied expectations and grew in April, reports Burton Frierson for Reuters. It was the first time the sector grew in four months. It covers financial, airlines, hotels and restaurants and represents roughly 80% of the U.S. economy.

The market responded to the report positively, but then resumed its southward direction.

Financial ETFs were down in trading today, as well. Among them:

• Regional Bank HOLDRs (RKH): down 1.6% year-to-date; Bank of America is 9.1%
• iShares Dow Jones US Financial Services (IYG): down 4% year-to-date; Bank of America is 10.9%
• Vanguard Financials (VFH): down 2.7% year-to-date; Bank of America is 6.6%