Weekly Update 14 Jan 22 and 2021 Review

Gold stocks and cryptocurrencies moved higher; national currencies, bonds, and major stock indexes fell, while commodities were mixed. The broad 30 crypto index was the best performer, rising 3.9%, followed by crude oil, up 3.7%. Palladium fell the most, dropping 3.4%, followed by the Dow Industrials, off 2.5%.

The US Dollar and Chinese Yuan were the weakest national currencies, falling 1.7% and 1.5% respectively. The Japanese Yen outperformed its peers, closing down just 0.1%. Short term notes and long term bonds underperformed USD cash, dropping 1.8% each.

Cryptos recovered a bit this week, led by the CCi30 index, up 3.9%. Bitcoin rallied 2.0% and Ether gained 1.9%. Some smaller cryptos posted sizzling returns; for instance, Monero (XMR) was up 15.9%.

Although gold stocks rose 1.7%, all the major stock indexes fell, led by the Dow Jones Industrial Average which closed down 2.5%, and the S&P 500, which dropped 2.0%. Like the Yen, the Nikkei index outperformed its peers, sliding only 1.3%.

Commodities were a very mixed bag, with crude oil rising 3.7% while palladium fell 3.4%. Cotton rose 2.2%, but coffee fell 1.2%. And among the metals, silver gained 2.1% while copper fell 1.0%.

Looking back over 2021, cryptocurrencies were the stand-out winners, while precious metals and gold mining stocks were the biggest losers.

Ethereum started the year at its lows, about 12 grams, and rose to an all-time high of 82.1 grams on Nov 11th, before pulling back to finish the year at 63.4 grams, up 412%. Bitcoin followed a similar pattern, but peaked a few weeks earlier at 1154.4 grams, and fell farther, to close at 797.6 grams, up 66.9%. Bitcoin's overall volatility seems to be decreasing as more institutional money enters the space. Ether has been driven higher by a series of new use cases, including decentralized finance and non-fungible tokens (NFTs) representing art, collectables, intellectual property, real estate, and securities.

National currencies were mixed, with the Canadian Dollar and Chinese Yuan being the best performers, up 5.4% and 5.1% respectively. The Japanese Yen was the weakest currency overall, dropping 6.3%. Bonds were mixed, with short term notes rising 3.8%, but underperforming USD cash. Long term bonds finished the year down 0.3%.

The large cap stock indexes were all in the green, led by the S&P 500, up 32.6%, and the DJIA, up 24.1%. The Japanese Nikkei was weakest, gaining just 1.3%.

Gold stocks and precious metals were the year's worst performers. Palladium fell 11.9%, the HUI gold mining index dropped 9.7%, and silver closed off 8.9% for the year. Other commodities did much better: coffee soared 84.3%, crude oil gained 62.0%, and cotton rose 50.7%. Even copper turned in a respectable 32.5% gain.

It will be interesting to see if the precious metals complex can regain traction, and if stocks, commodities, and cryptos can keep up their excellent returns in 2022. Wishing you the best of luck with your investments for the coming year!

Click for PDF version