Precious Metals Lead in April on Greek Crisis


"precious metals became the strongest performing commodities for the month of April"

As the Greece crisis cast clouds over the long-term viability of euro, precious metals became the strongest performing commodities for the month of April despite a strong dollar. Investors took refuge in the 'safe haven status' of gold and silver.

Andrew Karsh, co-lead portfolio manager for the Credit Suisse Total Commodity Return Strategy, said, "As Greece's debt-funding needs continue to cast a cloud over the long-term viability of the euro, the USD and traditional commodity assets such as gold have benefited—gold outperformed the dollar last month, though both posted solid gains. Because of the unique behavioral patterns of commodities compared to traditional fixed income and equities holdings, they have the potential to help hedge exposures to volatile markets, rising inflation, geopolitical risk and even currency movements. As a result, we are seeing the asset class continue to gain favor among investors in the current environment."

Christopher Burton, co-lead portfolio manager, added, "In addition to the current focus on Greece, it is notable that debt burdens and deficits have generally grown sharply around the world. Combined with large fiscal deficits, it is possible that inflation may begin to rise. Because commodities are inherently a driver of inflation, and are therefore positively correlated to unexpected changes in inflation, we've seen a growing number of investors increasing their exposure to the asset class over the past few months."

Industrial metals was the only sector with negative returns, down 3.22%, as copper, zinc and aluminum all declined on worries about weaker demand resulting from the crisis occurring in Greece.

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