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Gold has led the commodity conversation, up 83% for the three years ending June 2025, while broad commodity benchmarks like the GSCI TR and BCOM TR have been flat. This echoes the early 2020s, when gold rallied first, followed by a broader commodity surge during the inflation wave.
Now, signs of rotation are emerging again. Over the past two months, gold has traded sideways while momentum builds in other areas – particularly metals like platinum, silver, and aluminum (see Chart 1 below). Even agricultural markets like canola (rapeseed) and soybean oil are showing strength. At Auspice, we have added more long positions recently than at any time since summer 2020.
Chart 1 – Recent strength in the metals sector (for period May 1, 2025 to June 30, 2025)
Source: Auspice Capital and Bloomberg
Echoes of 2020
In 2020, gold captured early inflows in Q1. By Q3, the rally broadened to energy, metals, and agriculture. A similar dynamic may be unfolding today.
While the backdrop differs, there are significant similarities in terms of geopolitical uncertainty and inflationary risks on the horizon. Energy and metals demand vis-à-vis AI and electrification are straining an already structurally tight commodity supply alongside other new drivers including tariffs and a declining USD.
Broad Commodities vs Gold
Over time, diversified commodity indices like the BCOM TR and GSCI TR have delivered more consistent returns than gold. This is especially true in inflationary environments. While gold and broad commodity indices all did well in the 1970s, from 1980 to 2000 – two decades – gold traded down.
Chart 2 – Gold versus broad commodity benchmarks 1970 to 2000
Source: Auspice Capital and Bloomberg
While gold is seen as a store of value, it is also driven by sentiment, policy expectations, and currency dynamics. Only 7-10% of gold is used for industrial use. Broad commodities, on the other hand, are tied to economic activity. They reflect the inputs that drive inflation directly.
CTAs in a Rotating Market
Commodity Trading Advisors (CTAs) are structured to manage risk and adapt to evolving market conditions. While they may not always lead in the earliest phase of a commodity rally, they are built to capture sustained trends once they emerge.
Recently, higher-than-average volatility without clear directional moves has tested CTA strategies. This is not the long-term experience, however. Since the inception of the BTOP50 CTA Index in 1987, CTAs have delivered stronger long-term returns than gold or commodity beta, and have done so with significantly lower risk. See Chart 3 below, comparing the BTOP50 with the BCOM TR, GSCI TR, and Gold.
Chart 3: Commodities versus Gold and CTAs (for period January 1987 to June 30 2025).
Source: Auspice Capital and Bloomberg, as at June 30th, 2025. You cannot invest directly in an index.
From a historical perspective, the setup today is compelling. Trend signals are beginning to take hold across a range of commodity sectors, including metals and agriculture. The risk-to-reward for CTAs looks increasingly skewed to the upside, especially compared to gold, which is coming off one of its strongest runs in decades.
The Commodity Dichotomy
In equity investing, most portfolios include a diversified basket of stocks rather than relying on a single name like Nvidia or Apple. Diversification is widely accepted. In commodities, however, investors often take a different approach, focusing narrowly on one market, especially after strong performance. This overlooks the value of diversification and the challenge of consistently picking winners.
Gold has delivered standout returns recently, but that is not always the case. From 1980 to 2000, gold declined for two decades. Investors chasing past performance may miss broader opportunities across the commodity spectrum.
Conclusion
Commodity leadership is starting to shift. Gold has paused. Other commodities may be building momentum. This pattern is familiar and may be setting the stage for a broader rally in the asset class.
For investors focused on inflation protection and diversification, now may be the time to look beyond gold. Tactical commodity strategies and CTAs offer a more complete and adaptive approach to the opportunity that is unfolding. But if gold trends up, we will continue to be long.
To learn more about Auspice tactical commodity strategies, email us today at info@auspicecapital.com.
DEFINITIONS
Indices
Indices and benchmarks are used for comparison purposes only or to illustrate comparisons against other widely used indices or benchmarks most commonly referenced by investors. Index statistics/data are sourced from Bloomberg. You cannot invest directly in an index.
The Bloomberg Commodity Index Total Return (BCOM TR) Index is a broadly diversified commodity price index that tracks prices of futures contracts on physical commodities on the commodity markets. No one commodity can compose more than 15% of the BCOM ER index, no one commodity and its derived commodities can compose more than 25% of the index, and no sector can represent more than 33% of the index.
S&P GSCI Total Return Index (GSCI TR) – A production-weighted commodity index covering a broad range of raw materials, including energy (crude oil, natural gas, gasoline, heating oil), metals (gold, silver, aluminum, copper, lead, nickel, zinc), agriculture (wheat, corn, soybeans, cotton, coffee, sugar, cocoa), and livestock (live cattle, feeder cattle, lean hogs). Its weighting heavily favors energy, making it sensitive to crude oil price movements.
XAUUSD (Spot Gold Price in US Dollars) – The spot price of one troy ounce of gold quoted in US dollars. Market Type: Cash/spot market, not a futures index. Use Case: Viewed as a safe-haven asset and store of value. No Yield: Unlike indices like BCOM or GSCI TR, spot gold does not earn collateral interest or roll yield. Note, the XAUUSD index is a slight overrepresentation of the return on Gold. Contact info@auspicecapital.com to learn more.
BTOP50 Index (Barclay CTA Index): The BTOP50 CTA Index is a benchmark for managed futures programs, specifically tracking the performance of the largest Commodity Trading Advisors (CTAs) who employ systematic, trend-following strategies. It is constructed and maintained by BarclayHedge and aims to reflect the representative performance of active CTA managers.
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