Lifting All Boats: Commodities BOOM!

by | Jul 15, 2021 | Headline News

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    This article was contributed by Crush The Street. 

    As an entrepreneur and an athlete for that matter, I can tell you I look for ways to be positioned and surrounded with the best possible chances of success.

    One of our long-lasting motivational lines is “rising tides lift all boats.” The key is being in the water with the boat of course.

    Inflation has been the name of the game in 2021. But in reality, the setup of this has been happening for years.

    The United States is now at 125% Debt-to-GDP surprisingly.

    Being in a vessel that reflects rising prices is essentially what the rich have done and even for those that are starting out in their wealth creation.

    The first half of this year saw extraordinary returns for anything and everything that benefits from the out-of-control U.S. dollar inflation that’s been taking place – despite the Federal Reserve’s insistence that inflation is “transitory.”

    As the dollar’s value deteriorates, tangible assets become more valuable in comparison. That factor, along with increasing demand and contracting supplies of certain commodities, has contributed to a bull market in a multitude of tangible, tradable items.

    However, not all commodities have performed equally – and some of them have outshone others with no signs of slowing down.

    Now, you might have heard about lumber entering into a massive bull phase. It might surprise you to learn, though, that lumber’s bubble has already burst, and it’s not even on the top-ten list of H1 2021’s best-performing commodities.

    A much better representative of the commodities boom of 2021 would be copper. Known for its conductive properties, copper has been highlighted in recent months as the U.S. government negotiates a massive infrastructure bill.

    Copper started off the year at $3.55 per pound, but then the price surged through May, landing at $4.30 at the halfway mark of 2021. Therefore, copper provided returns of 21% – and keep in mind, more infrastructure spending is likely to boost the price of copper even higher.

    It’s no secret that the per-gallon price of WTI crude oil has gone up; we’re all reminded of this every time we fill up our gas tanks.

    This is due to a number of factors, including the economic recovery from the Covid-19 pandemic, along with various tensions happening in the Middle East.

    The oil price has gone up steadily throughout the year so far, only stopping to take a breather briefly in March. From $47.50 to nearly $75, crude oil’s 57% gain has been nothing short of astounding.

    Moving over to the precious metals markets, an unexpected star has emerged in 2021’s first half: palladium. Starting off the year at $2,386, palladium rocketed to approximately $2,770 in a brief six-month span, thereby providing a robust 16% return.

    And for folks who enjoy a cup of joe in the morning, here’s an asset class that futures traders sometimes obsess over, but retail traders don’t often consider: coffee.

    Again, the recovery from the pandemic is a contributing factor here – and actually, Covid-19 didn’t seem to slow down coffee consumption habits as people sought out the foods and beverages that brought them comfort during this challenging time.

    On a per-pound basis, coffee started in 2021 at $1.28 per pound. Six months later, however, the price was all the way up to $1.56. Now, that might not sound like a huge gain, but percentage-wise it represents a nearly 22% return.

    Then there’s natural gas, which often gets less attention than other commodities but has been profitable this year so far.

    Patient investors went on a roller-coaster ride as the natural gas price wobbled during the first few months. However, the price bottomed out at $2.45 in early April, and then took a moon shot to $3.68 for a powerful 50% return by the end of June.

    Last – but definitely not least – is uranium, which absolutely deserves investors’ attention in 2021. Uranium started off the year at $30.85 per pound, and hit $32.50 at the year’s midway point for a 5% gain.

    That’s actually a good thing, as there’s a tendency for commodities to rotate: coffee and crude oil might be in favor during the year’s first half, but then traders are likely to turn their attention to something else for the second half.

    And, uranium is as strong a candidate as any commodity. We live in a time when powerful nations are implementing clean energy initiatives – and uranium is as clean a power source as you’ll find anywhere.

    So, don’t be too surprised if uranium powers ahead in H2. It’s a rare setup in the commodities space, which can quickly enrich your portfolio if you get in at the right time.


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