As the first quarter draws to a close, losers outnumber winners when it comes to commodities—undoubtedly much to the disappointment of those who expect the sector to build on last year’s bounce.
“The first quarter of 2017 has been disappointing, especially after last year’s brief, but promising rebound from a 5-year downtrend, as commodities just haven’t managed to gain any traction into the post-[U.S.] election year,” said Adam Koos, president of Libertas Wealth Management Group.
The Bloomberg Commodity Index
a diversified commodity price index, was down roughly 2.5% year to date through Wednesday. It scored a gain of more than 11% last year after five consecutive years of declines.
Natural gas, coal and oil are among the commodities that have suffered big declines, while lumber, lead, palladium, gold and silver are among notable gainers.
“The presidential election has been a common contributor for many commodities since the future has rarely been so clouded, masked by the potential for surprise policies,” said Koos, adding that “the only certainty this year as it pertains to commodities and the Trump administration is that there is no certainty.”
And that uncertainty comes on two levels: “policy shocks and…recoil” due to the potential for Congress “putting the kibosh on the policy in question,” said Koos. Last week, Republican leaders pulled Trump-backed legislation to repeal and replace Obamacare after failing to find enough support within their own party to assure passage.
Still, looking ahead, “there’s hope for gains in gold and other defensive commodities if Congress continues to shoot down ideas from the Oval Office,” he said.
Here’s a rundown of the commodities that made big moves, and where they might be headed next: