In Commodities Funds, Short Was Best This Week

A major appeal of the NCAA March Madness tournament is the near-certainty of some huge upsets. The fund world may have taken inspiration from that: A big investment upset -- in commodities -- made selection of a fund sector of the week for the period ended March 20 a slam dunk.

After sprinting to historic highs, commodity prices imploded as the truncated week drew to a close. Both gold and petroleum ascended to inflation-adjusted record altitudes before going into free fall.

Gold rocketed above $1,000 an ounce before plunging Wednesday, and ended the week struggling to keep its head above the $900 level. Similarly, crude oil topped $110 a barrel and then skidded sharply to fluctuate around the $100 level.

Analysts speculated that problems resulting from the credit crunch forced hedge funds to liquidate commodities contracts in order to raise capital. In addition, a strengthening of the dollar toward the end of the week diminished the appeal of tangible holdings such as commodities. ...