LO Funds (CH)
Commodity Risk Premia ex
Agri

The Bloomberg Commodity ex-Agri & Livestock TR (BCOMXALT Index) was down -8.11% over the month of April.

Energy was the driver of the negative performance this month, followed by Industrial Metals notably with concerns over economic growth prospects weighing on market sentiment. Policy uncertainties were supportive of precious metals which was the best performing complex.

INDUSTRIAL METALS

“Liberation Day” tariffs was the dominating expression of the month for the industrial metals complex, and all members of the complex posted negative figures in April. It is worth noting that front loading of import into the US in anticipation of tariffs somewhat muted the price response in industrial metals.

Copper was in negative territory despite being exempted from reciprocal tariffs, the threat of an investigation into US copper imports looms over the market. Dimming forward-looking macro prospects were the driving headwind.

Aluminium was also in negative territory. “Liberation Day“ raised tariffs on aluminium from 10% to 25%, but as over half of US’s aluminium imports come from Canada, they are largely exempt. The drag on automotive demand created by tariff was the driver of the metals prices this month, with around 25% of global aluminium demand accounted for by the auto industry.

Nickel and Zinc were also both in negative territory, nickel somewhat benefited its use in green energy, which inoculates it somewhat from tariffs while Zinc was clearly at the receiving end of the cooling macro sentiment.

PRECIOUS METALS

Policy uncertainty following the 90-day hiatus on reciprocal tariffs of “Liberation Day” led to a drop of the USD, which provided the backdrop for the bullish sentiment for precious metals.

Gold had a very volatile month but ended up as the ultimate beneficiary of the market turmoil. On top of this, purchases by central banks have kept on going, which is another supportive factor for gold prices.

Silver, probably due to its hybrid nature between a precious and an industrial metal did not benefit from this market configuration and behaved more in line with industrial metals this month. Platinum was down as well in April.

ENERGY

The energy complex was down over the month, also on concerns about global demand and on the back of some researchers revising their economic outlooks to call for a recession.

Worse performing commodity was the WTI, followed by Natural gas and Brent. Energy products were also down over the month, as were Carbon EUA prices.