(Bloomberg) Gold began the year with lofty expectations on the back of a record high and its biggest annual gain in a decade. Instead, the precious metal is off to its worst start in 30 years.Spot prices touched a seven-month low on Friday before erasing losses as the dollar moved lower, though bullion is already down more than 6% this year.The metal, which surged last year on pandemic-induced haven buying, low interest rates and stimulus spending, is now 2021’s worst performer in the Bloomberg Commodity Index. It’s suddenly facing a host of unexpected stumbling blocks. Chief among those are the surprising resilience in the dollar and a rally in U.S. Treasury yields as economic indicators show recovery from the pandemic is well under way.With “rates going higher and inflation expectations peaking out, we’re seeing a lot of profit-taking in gold and people are going from gold into industrial metals such as copper,” said Peter Thomas, senior vice pres
(Bloomberg) Gold began the year with lofty expectations on the back of a record high and its biggest annual gain in a decade. Instead, the precious metal is off to its worst start in 30 years.Spot prices touched a seven-month low on Friday before erasing losses as the dollar moved lower, though bullion is already down more than 6% this year.The metal, which surged last year on pandemic-induced haven buying, low interest rates and stimulus spending, is now 2021’s worst performer in the Bloomberg Commodity Index. It’s suddenly facing a host of unexpected stumbling blocks. Chief among those are the surprising resilience in the dollar and a rally in U.S. Treasury yields as economic indicators show recovery from the pandemic is well under way.With “rates going higher and inflation expectations peaking out, we’re seeing a lot of profit-taking in gold and people are going from gold into industrial metals such as copper,” said Peter Thomas, senior vice pres
Soy falls most since 2018 amid commodities rout
Bloomberg
Soybean futures ended the week down more than 6 percent, the most in more than two years, as COVID-19 concerns weighed on financial markets and traders awaited further news on the Brazil harvest. Corn and wheat also slid.
Output in the world’s biggest soybean growing country might total 132.4 million tonnes, Agroconsult president Andre Pessoa has said.
While that is down a bit from a estimate in November last year, it would still be an all-time high as moisture shortages ease in the south.
Average yields are higher than last year, and recent conditions have been generally favorable.
The VanEck Vectors
® Real Asset Allocation ETF (“RAAX”) and real assets broadly both finished the year on a positive note. RAAX returned +0.44% versus +4.97% for the Bloomberg Commodity Index and +4.82 for the Blended Real Asset Index. However, the total return for RAAX with the yearend distribution included was +6.53%, outperforming both indices during the month.[1]
The rally in real assets continued into December as investors continued to weigh the near-term risks of inflation. RAAX has been a huge beneficiary of this change in sentiment because of the ability of real assets to hedge against inflation. Regardless of where you stand on the “great inflation debate”, it seems unwise to ignore this risk and fail to position your portfolio accordingly.