S&P GSCI Commodity Perspective for April 2008

London, May 08 2008

The S&P GSCI Energy Index led the wider S&P GSCI in April, with gains of 11.32% for the month.

Crude oil seemed to confound many of the experts who expected futures to stall above $100/bbl, as supply disruptions in Nigeria, pipeline shutdowns in the North Sea and refinery strikes in the UK influenced performance.

Precious metals fared badly last month, as gold in particular was affected by profit-taking. In addition to the easing of credit crisis fears and the first monthly increase in the dollar index this year, stories of individuals selling their jewellery, falling demand from some traditionally favourable societies like India and central bank liquidation contributed to April's 6.02% decline in the S&P GSCI Gold Index.

The S&P GSCI Industrial Metals Index declined 0.95% in April, as a 2.6% increase in the S&P GSCI Copper Index was offset by an average 3.6% decrease in aluminium, lead, nickel and zinc. Copper's strength can partly be explained by increasing demand from China and energy shortages and labour unrest in Chile, the world's biggest copper producer.

What goes up must come down may not always seem true in the commodity markets, but it certainly has been the case with wheat in 2008. The S&P GSCI Chicago and Kansas Wheat Indices were the worst performers in the S&P GSCI Index during April, dropping an average of 14.25% as the market became saturated with increased planted acres.

Published monthly, the Commodity Perspective highlights developments in the commodity markets as measured by the S&P GSCI, whose components include Energy, Industrial Metals, Precious Metals, Agricultural and Livestock indices.

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