Best-Performing ETFs of Last Week: Commodity Wins

NEW YORK – While major U.S. stock indices faltered last week under the weight of geopolitical uncertainty, a starkly different story unfolded in the commodity markets. A potent combination of safe-haven demand, acute supply shocks, and shifting monetary policy expectations propelled a select group of exchange-traded funds (ETFs) to staggering double-digit gains, underscoring a significant rotation of capital into hard assets.

As Wall Street digested renewed trade threats and a risk-off sentiment took hold, the S&P 500 shed 0.4%, the Dow Jones Industrial Average retreated 0.5%, and the tech-heavy Nasdaq Composite dipped 0.1%. The cautious mood was primarily fueled by escalating trade tensions between the United States and several European nations, creating an environment where tangible assets shone brightly.

The Macroeconomic Climate: A Shift to Hard Assets

The primary catalyst for last week's market anxiety was the Trump administration's threat of a new wave of protectionist tariffs against European allies. The tension, stemming from the "Greenland row," involved potential duties ranging from 10% to 25% on eight European countries, with some reports suggesting tariffs could reach as high as 200% on certain French exports.

This uncertainty drove investors away from equities and toward traditional safe havens. Gold, the classic barometer of fear, surged, with the bellwether SPDR Gold Trust (GLD) climbing 8.4%. This flight to safety set the stage for a banner week across the broader commodities complex, where specific supply-and-demand narratives created explosive price action.

Here, we detail the top-performing ETFs of the week, each capitalizing on unique and powerful market forces.

A Banner Week for Commodity ETFs

Natural Gas Soars on Historic Winter Freeze

United States Natural Gas Fund LP (UNG): +35.2%

U.S. natural gas futures experienced a meteoric rise as a severe winter storm blanketed the nation. The extreme weather created a perfect storm for prices, simultaneously crippling supply and sending heating demand to seasonal highs.

• Primary Driver: A historic, widespread winter storm tore across the United States, causing a rapid and dramatic drop in temperatures.
• Supply Impact: The severe weather and freezing conditions forced the shutdown of critical infrastructure, choking off nearly 10% of total U.S. natural gas output, according to data from Trading Economics.
• Demand Impact: Concurrently, the frigid temperatures spurred a massive, nationwide increase in demand for natural gas for residential and commercial heating, creating a severe supply-demand imbalance.

Platinum Hits New Highs on Investment Demand

GraniteShares Platinum Trust (PLTM): +20.8%

Platinum futures extended a record-breaking rally, driven by a confluence of strong investor interest, a tight physical market, and favorable macroeconomic tailwinds. The metal benefited both from its precious metal status and its industrial applications.

• Market Dynamics: The rally was underpinned by a combination of robust investment demand and a physically constrained market, where available supply struggled to keep pace with new inflows.
• Macroeconomic Tailwinds: Broad expectations of impending interest rate cuts by the U.S. Federal Reserve, which tends to weaken the U.S. dollar, made dollar-denominated platinum more attractive to foreign buyers.
• Geopolitical Factors: Persistent global trade tensions and geopolitical uncertainty further enhanced platinum's appeal as a hard asset and a store of value, similar to gold.

Silver Shines on Safe-Haven Bids and Physical Demand

Sprott Silver Miners & Physical Silver ETF (SLVR): +17.0%

Silver prices surged as the metal's dual role as both a safe-haven asset and an industrial commodity came into sharp focus. The SLVR ETF, which provides exposure to both silver mining companies and the physical metal, was perfectly positioned to capture this upside.

• Dual Demand Drivers: A powerful wave of safe-haven buying, driven by geopolitical risk, was met with strong physical demand, particularly from retail buyers in key markets like China and India.
• Monetary Policy: Growing anticipation of a more dovish Federal Reserve and future rate cuts fueled significant investment inflows into silver, as lower rates reduce the opportunity cost of holding non-yielding assets.
• Market Tightness: The price surge was amplified by a prolonged tightness in the physical silver market, where inventories have been under pressure, leading to a more aggressive price response to new demand.

Gold Miners Gain as Bullion Extends Rally

Global X Gold Explorers ETF (GOEX): +14.1%

As gold prices continued their record-setting climb, gold mining stocks reaped even greater rewards. Mining equities often act as a leveraged play on the underlying commodity, meaning their share prices can rise at a faster pace than the metal itself during a bull run.

• Leveraged Play: The profitability of gold mining and exploration companies increases exponentially as the price of gold rises above their cost of production. This operational leverage makes their stocks highly sensitive to moves in the gold price.
• Underlying Asset: Gold bullion's rally was fueled by the same safe-haven fundamentals driving the broader precious metals complex, including geopolitical instability and expectations of looser monetary policy.
• Investor Sentiment: GOEX, which focuses on gold exploration companies, benefited from heightened investor appetite for higher-risk, higher-reward plays within the gold sector.

Palladium Climbs on Acute Supply Concerns

abrdn Physical Palladium Shares ETF (PALL): +13.3%

Palladium futures climbed to their highest level in over three years as acute supply concerns took center stage. The metal, a critical component in automotive catalytic converters, saw its price spike on fears of significant disruptions to global flows.

• Supply Chain Risks: Investor anxiety intensified over potential disruptions to North American metal flows, stemming from nascent trade tensions between Canada and China, which could impact a key supply corridor.
• Geopolitical Fears: Broader geopolitical risks, particularly those involving major producers, added to fears of a constrained global supply at a time when market inventories are already tight.
• Investment Activity: According to Trading Economics, strong investment inflows and heightened trading activity, especially in China, helped propel palladium prices higher, offsetting recent softness in global automotive demand.

What to Watch Next

Last week's performance highlights a clear divergence between risk assets and hard assets. For this trend to continue, investors will be closely monitoring several key developments.

• Geopolitical Thermometer: The direction of U.S.-Europe trade relations will be paramount. Any de-escalation could see capital rotate back into equities, while further threats would likely bolster the case for commodities.
• Federal Reserve Signals: All eyes remain on the Federal Reserve. Any communication that reinforces the market's expectation for rate cuts will likely serve as a continued tailwind for non-yielding precious metals like gold, silver, and platinum.
• Supply Chain Stability: For industrial-linked commodities like natural gas and palladium, the focus will be on the resolution of near-term supply disruptions. Weather patterns will dictate the path for natural gas, while the geopolitical landscape will steer palladium.
• Dollar Dynamics: The trajectory of the U.S. dollar will remain a critical factor. A continued weakening of the greenback would provide broad-based support for the entire dollar-denominated commodity complex.