Conclusion, Investment Implications, Strategy
The Invesco DB Precious Metals Fund (DBP) is has recently risen above its previous August 2011 benchmark high amid aggressive monthly expansion in investor assets and quarterly relative outperformance versus the S&P 500 (SPY). Together, these factors establish favorable conditions for more outright strength and relative outperformance by DBP and other precious metals related assets.
DBP Setting New All-Time HIghs Amid Expanding Assets and Relative Outperformance vs. the S&P 500
The upper panel of Chart 1 below shows that the Invesco DB Precious Metals Fund (DBP) has recently broken out to new all-time highs, exceeded its previous 69.52 August 2011 high. This is a major long-term bullish breakout for DBP, which invests in gold and silver futures contracts in an attempt to track its corresponding index. The middle panel shows that the total net assets invested in DBP (AUM) have been aggressively expanding on a 21-day monthly basis since early March. Expanding assets indicate bullish conviction in higher prices. The lower panel shows that DBP has been outperforming the S&P 500 on a 63-day quarterly basis since Jan 10th.
As long as these three conditions remain intact, DBP is likely to continue moving higher in the weeks ahead.
Chart 1
Current Sector & Industry Group Ideas
Table 1 below is also accessible via the Asbury ETF Trade Ideas rectangle at the top of the Research Center.
Table 1
Click the table to make it larger