Gold's precipitous decline in recent months has garnered a lot of attention in the headlines.
Of course, gold is only a single commodity in an asset class that had, for the most part, a pretty dismal first quarter of 2013.
The chart below shows how the entire complex has come under fire, making the broader asset class one of the worst performers of the year so far.
In a recent report on commodities, Société Générale analysts Michael Haigh and Jesper Dannesboe sought to explain the reason for across-the-board weakness in 2013:
The conditions are finally coming into place for a sustainable US economic recovery. This will provide some support for pro-cyclical commodities. However, while the US economy has arrived at ‘recovery-friendly conditions’, Europe is not there yet, and the recent acceleration in China’s economic growth is likely to fade by mid-year as the Chinese government’s policies to rebalance the economy act as a brake.
Therefore, the upside for commodity prices as a group is only moderately positive for the year and most of the upside is likely to come from energy prices. The recent sharp sell-off in base metal prices is, in our view, now overdone, and we should see a partial recovery during the second quarter. But this is unlikely to be extended into the second half of the year as Chinese economic growth should be slowing by then.
Some commodities, like gasoline, actually had a pretty decent Q1. However, it's tumbled 4 percent just today as energy commodities have come under fire, and now, it's about to turn negative year-to-date, joining most other commodities in the red.
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