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Commodities — Assessing 2021 and Forecasting 2022

Large price moves normally come in waves and the big winners rotate as the economy changes.

Co-Chair & CIO of Carbon Royalty Corp

New York Times Best Selling Author. ‘The Rise of America’ hit #1 on the Wall Street Journal & #1 on Amazon.
New York Times Best Selling Author. ‘The Rise of America’ hit #1 on the Wall Street Journal & #1 on Amazon.

Image source: Jingming Pan / Unsplash

We have flipped the calendar to 2022.

Whether you crushed it or got crushed in 2021, it’s time to sharpen your pencils, refocus, and prepare to capitalize on new opportunities.

Katusa Commodity Heatmap

As many of you know, commodities are cyclical.

Large price moves normally come in waves and the big winners rotate as the economy changes.

  • When the economy’s expanding, base metals and industrial commodities do well.
  • When the economy’s stagnating or declining, precious metals act as stores of value.

Below is a table which shows you the annual percentage return for select major commodities.

While very basic, it provides a great overview of what was hot and what was not in the past five years.

That’s equivalent to nearly two full years’ worth of emissions from all energy production around the world.

Image source: Katusa Research

Gold’s Mild Year

After a strong and profitable 2020, gold and gold miners struggled in 2021.

Bullion was down 4% while many miners saw their share prices decline by over 20%.

Inflationary conditions are driving expectations of interest rate hikes, which has put pressure on gold prices.

Further putting pressure on gold and contrary to the outlook of many gurus…

The U.S. dollar remained strong in 2021. With the U.S. Dollar DXY Index appreciating 4.70% for the year.

  • As I have said many times, don’t fight the Fed or underestimate the power of the U.S. dollar.

Gold miners themselves faced supply chain issues and cost increases were seen across the industry.

In addition, many mining stocks were victims of tax-loss selling and closed out the year near 52-week lows.

Even in a somewhat gloomy environment, however, at current gold prices of $1,800 per ounce, gold miners are incredibly profitable.

I expect 2022 to be a whipsaw year for precious metals with considerable volatility.

Uranium Heat

Uranium and uranium stocks had a banner year in 2021.

Physical uranium was up 40% on the year – its best year in over a decade.

The other yellow metal soared higher as physical buyers loaded up on uranium for immediate delivery, and uranium stocks soared as well.

A basic basket of uranium stocks returned +80% last year.

  • KRO subscribers were positioned in the number 1 uranium stock, which returned more than +200% in 2021.

Image source: Katusa Research

In 2022, I expect uranium to remain volatile with lots of opportunities for potential upside.

The current situation with protests in Kazakhstan could bring a shock to uranium prices. The country is the world’s largest producer of uranium.

To the uranium market, Kazakhstan is like Saudi Arabia, Russia, and all of OPEC to the oil market.

The Kazakh state-run operation Kazatomprom is the world’s largest, lowest-cost uranium miner in the world.

  • Kazatomprom produces over 40% of the world’s uranium.

Another key driver in 2022 will be new European legislation which may allow nuclear power to count as a “green” investment.

This would allow nuclear power producers to receive lower-cost financing for new builds and for refinancing current operations.

I also believe that the players within the spot market will continue to buy up any available pounds.

The billion-dollar question is if/when utility participants begin to lock in contracts at prices above $40 per pound.

It hasn’t happened yet but perhaps their hand will be forced this year.


Copper soared to record prices in 2021 as demand outstripped available inventory and supply.

  • I provided several free reports on copper over the years that explained why copper prices would soar—and 2021 was the year the copper price went a lot higher.

Copper demand surged last year as economies reopened, electric vehicles were produced and renewable power plants were built.

As I wrote in my free article Copper: The Big Squeeze, the world is going to need a lot more copper as it electrifies.

Image source: Katusa Research

Copper producing regions continue to face scrutiny over labor and ESG issues. Strikes at many major operations caused production shortfalls.

It would not be unreasonable to assume additional societal unrest in these major copper-producing regions in 2022.

Our top copper stock return in Katusa’s Resource Opportunities has given us an incredible 3,048% return since it started trading.

That is over 30 times your money—yes you read that right!

This isn’t a typical return…

But it’s a spinout company with an incredible asset and management where we got shares for free.

Carbon Attention

Carbon credits and emission permits were incredible performers in 2021.

The European Allowance permit, known as the EUA, was up 146% for the year.

“Green” carbon credits generated from nature-based offsets climbed 125% in 6 months of trading.

The “white” carbon credits utilized by the airline industry for offsetting rose 246% for the year.

Katusa Research is at the cutting edge of the carbon markets.

I’ve hired more staff specifically for carbon, and I myself am laser-focused on it.

KRO subscribers who bought positions in my carbon recommendation are sitting on well over 270% gains in less than 6 months.

  • The amount of deal flow and investment opportunities in the sector right now is unlike anything I have ever seen in any other market segment.

Perhaps the best thing about this market is that it’s literally being further developed and improved every day.

This creates even more opportunities for investors of all sizes.

I don’t think there’s anyone in the industry who puts in as much due diligence effort as I do.

Months of due diligence go into every idea.

Relationships with management teams are cultivated over years.

You simply can’t replicate this type of experience using market scanners or social media stock picks.

I have two brand new ideas coming down the pipe for my subscribers…

We are amidst one of the most exciting markets I’ve ever been a part of in my 20+ year career as a professional fund manager.

If you don’t want to miss out on any of my ideas, investments, or research – click here.

Marin Katusa is founder and CEO of Katusa Research, an independent investment research firm.


Equities News Contributor: Marin Katusa

Source: Equities News

The astronomer Carl Sagan said, “It was easy to predict mass car ownership but hard to predict Walmart.”