-- Posted Friday, 21 January 2011 | | Source: GoldSeek.com
By Frank Holmes
CEO and chief investment officer
U.S. Global Investors
If 2009 was a recovery year for commodities, 2010 was the year they regained their crown. The Reuters-Jeffries CRB Index jumped 17.44 percent in 2010. Combined with 2009’s 24 percent gain, the CRB has climbed nearly 45 percent off 2008 lows.
Twelve of the 14 commodities we track were in positive territory in 2010 and nine of them saw gains exceeding 20 percent. That’s in stark contrast to the bloodshed of 2008 when gold was the only commodity not in the red.
This updated version of our popular commodities periodic table shows how strong the bounce back has been.
Palladium was the top performer, rising over 96 percent during 2010. Part of this rise can be attributed to the explosion of auto sales in emerging markets since palladium is a critical component of catalytic converters in cars. Marketwatch reported in December that Johnson Matthey estimates palladium demand to have risen 27 percent in 2010.
Silver (up 83.21 percent), corn (up 51.75 percent) and wheat (up 46.68 percent) were next in line. Natural gas was the worst performer, falling more than 21 percent—its third-straight year of declines.
Looking over the past decade, you can see how strong the commodity space has been. Nine of the 14 commodities have averaged a double-digit gain per year since 2001. Silver has been the best performer, averaging a 21 percent rise each year, but lead (up 18.25 percent annually) and copper (up 18.1 percent annually) aren’t far behind.
The past ten years have been very kind to gold investors. Since 2001, gold has had a positive return each year and has averaged 17.97 percent a year.
It’s impossible to say whether the bull run can continue in 2011 but we believe that the same critical factors that have carried high commodity prices into this decade remain intact. Demand should continue to rise along with the emerging world and supply for most of these commodities will be hard pressed to keep up.
View the Interactive Version of the Commodities Table
The Reuters/Jefferies CRB Index is an unweighted geometric average of commodity price levels relative to the base year average price. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.
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All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.
