Commodities Were the Top Performers in 1H 2021: Halftime Report
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Until Monday, please enjoy Frank’s special commentary.
Commodities rallied 21% in the first half of 2021, making them the top performing asset group ahead of U.S., European, emerging market and non-Japan Asian stocks. The broad-based index of energy, agriculture, industrial metals and precious metals rose the same amount as high-flying Bitcoin, which pulled back after hitting its all-time high of more than $63,000 on April 13.
Among the commodities we track, West Texas Intermediate (WTI) crude oil was the number one performer, up nearly 52% on higher-than-expected demand and tight supply, while precious metals lagged, with silver down 1% and gold down more than 6%.
This represents a nearly complete reversal from the price action we saw in 2020. According to our Periodic Table of Commodity Returns, precious metals were last year’s winners—silver surged close to 48%, gold 25%—and oil was the big loser, slipping as much as 20%.
But appetite for risk has changed now that huge segments of the economy are reopening. Demand for fuel has increased as Americans act on pent-up wanderlust: Earlier this month, a greater number of people flew on commercial jets in the U.S. than on the same day in 2019, before the pandemic. And in the days leading up to the busy Fourth of July holiday weekend, gas stations across the country were reportedly running out of gas.