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.

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