Commodity & ETF Navigator – May 10th, 2021

Year-to-Date Commodity Heat Map

Green Metals

The green metals complex has had a stellar 2021.  Lithium has led the way, rising 61% YTD, followed by vanadium +37%, cobalt +41% and copper +34%.

Copper soared to an all time highs on Friday, reaching as high as $10,440 a ton. The metal is surging on the back of surging manufacturing output in the US, Germany and Japan. Investors are also piling into the metal as a bet on the growth of electric vehicle penetration.

Soft Commodities

Soft commodities continue to be well bid, with Lumber leading the way up 93% year-to-date. New homes now cost approximately $36,000 more because of the epic shortage of lumber.

Store of Wealth

Gold and Silver have struggled relative to Bitcoin since the COVID pandemic, on a year-to-date basis Bitcoin is up 100% while gold and silver are effectively flat (-3% and +4% respectively).

However in the last month we’re seeing signs of relative strength in precious metals; gold is up +6%, silver is up +11% and Bitcoin ins down -4%.

While Ethereum isn’t included in the store of wealth category because of the lack of a supply limit (Bitcoin has a cap); the cryptocurrency has been a rocket ship. Ethereum is up 466% YTD and an astounding 2,100% over the last year.

Commodities vs. Mining Stocks

Copper

While Copper has had a stellar 1 year return of 100%, the Global X Copper Miners ETF (NYSE:COPX) is up 210%. While certain copper miners have done significantly better over the last year: Freeport McMoran (NYSE:FCX) is up 390% and Sierra Metals (NYSE:SMTS, TSX:SMT) is up 356%.

Gold

Gold miners have performed inline with the metal on a 1 year and 5 year basis.  Among the large cap gold miners Barrick Gold has been a laggard over the last year; down -12% vs. the peer group up 7% (Vaneck Gold Miners – NYSE:GDX).

Silver

Silver miners have been structural underperformers, the Global X Silver Miners ETF (NYSE:SIL) is underperforming silver across all time frames – 1, 3 and 5 years. This is a sector that Capital 10X will be doing a deep dive on to understand what stocks are poised for a sizable valuation re-rating.

 

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Sierra Metals is a market awareness client of Capital 10X.

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

Capital 10X gets down to the real money business, actionable financial insights for traders and investors. We analyze company earnings, interview management teams and help teach the fundamentals of financial analysis and options trading. Our mission is to hunt for genuine 10 baggers.
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