2021 is finally here, and I’ll keep that note short and sweet. Markets appear to be bracing for another parabolic move higher. From an economic point of view, we should see growth continue to accelerate, inflation rise and the Fed remain accommodative. This combination should prove to be favorable for a wide range of commodities, allowing year-over-year growth in demand to outstrip supply.
At the time of writing, some of the most notable “year-to-date” performance numbers for raw materials are Lumber + 67%, Silver + 47%, Soy + 37%, palladium + 28%, copper + 25%, gold + 24%, Sugar + 15% and Platinum + 10%. The four worst performing are gasoline -17%, WTI crude oil -21%, Brent crude oil -22% and finally fuel oil -27%. Heating oil acts as a proxy for diesel fuel and bunker fuel, and with the global economy crashing into a crash, these products may perform best once a reopening takes place.
High conviction professions for 2021
- Call spreads long April Silver 29.50-35.00
- Long February Copper 360-365-368 call butterflies
- 10-year long note sales spreads 138-135 March
- The mini crude oil futures march long using a ladder approach at three and four star support levels.
- Long March Futures on Copper from the Three and Four Star Support Levels
- March US Dollar Short Futures Against Three- and Four-Star Resistance Levels
- Long April Platinum Futures
- Long March Micro Russell on correction to three and four star support levels
- Long the March Canadian dollar (this is a commodity currency that works the reverse of the US dollar.
- We will be posting a new gold recommendation this week using the June contract.
One way to get 2021 on the right track is to sign up for a free two-week trial of our Morning Express. Here we provide technical data, fundamentals, market biases and our proprietary actionable levels for the most actively traded futures and commodities markets, including gold and silver. In addition, on Thursdays we will be posting an additional note on Copper and Platinum. You can sign up here: Sign up for the two week free trial of Blue Line Express.
Warning: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not a solicitation to effect an exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept guilt for any loss and / or damage resulting from the use of this publication.
