A calm before the storm?

Industrial metals, however, remained under pressure in December. Copper prices held up better than the rest of the base metal complex but also declined due to globally available inventories, which remain at above average levels since the end of the Covid pandemic. Nickel came under selling pressure despite headlines suggesting that Indonesia, the world's largest nickel producer, intends to cut its production quota.

Among precious metals, gold recorded its highest annual return since 2010. However, the year-end was characterized by profit-taking. In addition to volatility in the EFP basis fueled by tariff fears, increasingly receding expectations for further USD policy rate cuts were responsible. This was also reflected in a reduction of gold holdings by ETFs. The silver price corrected much more strongly in December and thus could not quite keep pace with gold's development on an annual basis.

In agricultural commodities, grain prices suffered particularly over the past year. In December, however, this sector provided a bright spot with rising prices across the board, led by corn. The latter benefited from improved export prospects for US corn, which has become competitive again on the world market, especially compared to Argentina, as well as increased ethanol demand. The soybean complex was aided by excessive drought in Argentina, except for soybean oil, over which the Damocles sword of future tariffs under the Trump administration hangs. Soft commodities, on the other hand, which had benefited from supply shortages throughout the year, ended December weaker.

Picard Angst All Commodity Tracker weaker than the basis strategy

The broad commodity benchmarks mostly gained in December. The broadly diversified Bloomberg Commodity TR Index improved moderately by +1.02%, while the S&P GSCI Commodity TR Index benefited from its high energy exposure (+3.28%). Our in-house PACI strategy, however, struggled on various fronts in December and declined by -0.52%. This was particularly due to the high exposure to precious metals and soft commodities (raw sugar) as well as the strategic decision not to allocate to natural gas. The Picard Angst All Commodity Tracker Plus Fund performed weaker than the base strategy with a return of -0.87% (share class D in USD), as the adaptive roll and contract selection overlay made a negative contribution in the reporting month.