Investor Alert

Elon Musk Decried as “Lettuce Hands” After Tesla Dumps 75% of Its Bitcoin Holdings

Author: Frank Holmes
Date Posted: July 22, 2022 Read time: 44 min

“Lettuce hands” is an expression some people use to describe an investor who sells their Bitcoin at the first sign of trouble, often at a loss. An example of its use in a sentence might be: “Elon Musk has lettuce hands because he sold 75% of Tesla’s Bitcoin holdings in the second quarter.”

The above sentence is more than an example; it happens to be the truth. During Tesla’s quarterly results webcast this week, Musk admitted to dumping some $936 million of Bitcoin to raise cash out of concern of an economic pullback due to pandemic lockdowns in China. The chief executive said he sold for a “realized gain,” but some people online have some serious doubts.

To be fair, Musk added that he was open to buying more in the future. But to many Bitcoin fans and advocates, his decision to sell feels like a betrayal—especially since he continues to hold the meme coin Dogecoin, created in 2013 as a joke.

When Tesla initially announced in February 2021 that it had bought $1.5 billion in Bitcoin, the crypto community saw this as signaling the start of a trend of big companies and other institutional investors holding the digital asset on their balance sheets. The enthusiasm only mounted the following month when the electric vehicle (EV) maker announced it would begin accepting Bitcoin as payment.

These plans lasted little more than a month before Musk suspended Bitcoin payments. The reason? Mining the asset, he claimed, consumed too much energy and emitted loads of greenhouse gases.

We now know that Musk’s concerns, while valid, were and are not grounded in truth. Some might call them FUD, or fear, uncertainty and doubt.

Bitcoin Miners Are the “Buyers of Last Resort” When It Comes to Sustainable Energy

Musk is right in one respect: Bitcoin mining is energy intensive, no doubt about it, and it will only get increasingly more energy intensive on a per-coin basis as the difficulty rate heads higher.

Where he’s mistaken is in saying that Bitcoin mining is dirtier than other industries. The truth is that institutional-size miners’ usage of renewable, non-carbon-emitting energy has been shown to be greater on average than that of any large country on earth.

Below are the second-quarter survey results from members of the Bitcoin Mining Council (BMC), of which HIVE Blockchain Technologies is a founding member. According to the data, sustainable energy (wind, solar, hydro, geothermal, etc.) represents an impressive 66% of BMC members’ power mix. For the entire global Bitcoin network, it’s nearly 60%. No G20 country comes close to using that level of renewable energy as a percent of total energy use.

Sustainable Power Mix: Bitoin Mining Vs. Countries

And as many others have pointed out, including myself, large-scale Bitcoin miners are very often the buyers of last resort when it comes to renewable energy. They regularly consume much of the electricity that otherwise would have gone to waste during non-peak hours. This makes sustainable energy more competitive and will encourage further deployment of wind and solar.

Dennis Porter, CEO of the Satoshi Action Fund, whose mission is to educate policymakers on the merits of Bitcoin, takes it a step further. Bitcoin mining, he said in a recent tweet, will one day “be such an important part of the grid that if they try to ban it, we’ll all be without power.”

Despite all of this, Tesla still has no plans to begin accepting Bitcoin as payment again. The only digital asset it does accept is Dogecoin, whose market cap is only about 2% the size of Bitcoin’s.

Shanghai Lockdown a Challenge for Tesla in Q2

We continue to like Tesla, nevertheless. The lockdowns in Shanghai were a huge challenge for the carmaker in the second quarter, with profits down compared to the prior quarter. Now that factories are back up and running, though, we expect to see stronger results when the company reports on the third quarter.

Like tech stocks and luxury goods stocks, both of which Tesla is considered a member, shares have traded down into bear market territory this year on rising rates, recession fears and global supply chain issues.

Telsa vs Tech Stocks and luxury goods

Global Bitcoin Adoption to Hit “Parabolic Phase” in 2030

Tesla’s suspension of Bitcoin payments raises questions regarding the digital asset’s viability as a currency and widely accepted medium of exchange. More and more companies and retailers will take your Bitcoin, but so far, a relatively few transactions are made using the crypto. According to one source, Bitcoin currently processes only around seven transactions per second compared to Visa’s 1,700 and Mastercard’s 5,000.

But it won’t be like this forever, says the latest research by blockchain infrastructure firm Blockware Solutions.

In a June report, the company looks at historical adoption trends for a number of previous disruptive technologies, including the automobile, radio, internet, smartphone and more. Although the speed of adoption in these cases differed, one thing was certain: Once adoption hit 10% of the population, growth became “parabolic” as penetration shifted from the “early adopters” to “early majority,” and finally to the “late majority.”

Long story short, Blockware predicts that global Bitcoin adoption will break past 10% in the year 2030.

After that, growth could become parabolic, eventually reaching 80% of the population in the 2050s.

Long-Term Projection of Global Bitcoin Adoption

Just as a reminder, Bitcoin supply is capped at 21 million. Divide that among 8 billion people, which is what global population is projected to reach later this year. The model above suggests that owning just one whole Bitcoin and holding it for the long haul could end up generating not only life-changing wealth but generational wealth.

Did you miss HIVE Blockchain’s results for fiscal year 2022? Watch the replay by clicking here!

Index Summary

  • The major market indices finished up this week. The Dow Jones Industrial Average gained 1.95%. The S&P 500 Stock Index rose 2.55%, while the Nasdaq Composite climbed 3.33%. The Russell 2000 small capitalization index gained 3.58% this week.
  • The Hang Seng Composite gained 1.53% this week; while Taiwan was down 17.95% and the KOSPI fell 19.63%.
  • The 10-year Treasury bond yield fell 16 basis points to 2.757%.

Airline Sector


  • The best performing airline stock for the week was Aegean Air, up 9.2%. American and United both reported their first operating profit since the start of the pandemic, writes CNN Business, as strong demand for air travel and high fares allowed the carriers to overcome rising fuel prices. The amount passengers paid to fly each mile on the airlines in the quarter was up just over 20% compared to 2019, by far the highest per-mile fares paid since the start of the pandemic. The spike was driven by a combination of less capacity across the industry and strong demand for air travel.
  • Lufthansa’s pre-released second-quarter EBIT of EUR350-400 million was well above consensus estimates of EUR189million/221milion on better-than-expected cargo and passenger unit revenue. The airline benefitted from continued strength in its cargo and MRO businesses. Passenger airlines operating profit remained negative but was supported by a significant improvement in yields and loads, as per the company.
  • SAS and pilots’ unions reached a wage deal on Monday, reports Reuters, ending a strike over a new collective bargaining agreement that has grounded hundreds of flights and thrown the airline’s future into doubt. Most SAS pilots in Sweden, Denmark and Norway walked out on July 4 triggering a strike that SAS has said cost it between $10 million to $13 million per day. “What I’m hearing from the negotiation room is that we have a deal,” a spokesperson for Dansk Metal, one of the unions representing SAS pilots, told Reuters, adding the agreement was not yet finalized. 


  • The worst performing airline stock for the week was Finnair, down 9.4%. Despite resilience in previous weeks, August capacity is marked down this week by 1.5%. Following the announcement by Heathrow (cap on daily departing passengers at 100,000 through September 11) and Lufthansa (additional cuts in capacity into July/August) as well as more strike movements (Transavia now joining rolling strikes at easyJet/Ryanair in Spain), there may be further trimming of capacity in July/August/September in the weeks ahead.
Capacity Is Being Reduced at Major European Airports
  • Air France KLM’s low-cost unit Transavia said it was cancelling around 25% of its French flights on Thursday due to a strike protest among some staff regarding pay and working conditions. Dozens of cabin attendants, stewardesses and stewards have been on strike since Wednesday, the national union of cabin crew SNPNC said, which plans to have its actions last until July 17. Transavia’s management had to cancel 15% of its flights on Wednesday.
  • United Airlines is lowering its capacity outlook to address operational disruptions (related to government infrastructure, particularly at Newark), higher fuel prices, and the potential for an economic slowdown. The second half 2022 capacity plan is likely to surprise to the downside and is seven points below consensus. 


  • Airbus is in talks with Jet Airways for a deal of up to 50 A220 airplanes. On July 1, Airbus announced orders with Air China, China Eastern, China Southern, and Shenzhen Airlines for 292 aircraft from the A320neo family.
  • According to Bank of America, the latest forward indicator of airline unit revenues improved to -2.9 at the end of the second quarter from -6.9 in the first quarter of the year. After the January indicator showed a strong rebound in domestic unit revenues into the second quarter, which aligned with airline second quarter guidance outlooks, the indicator is signaling smaller sequential improvements into the back half of 2022. This aligns with the bank’s forecast for industry domestic revenues to meaningfully step up to +11% versus the same quarter in 2019.
  • According to JPMorgan, aside from earnings, we appear to be in the final innings of the Spirit Airlines M&A saga after the Frontier-Spirit merger shareholder vote was postponed a third time, signaling insufficient support for the merger. As such, JPMorgan continues to see increased probability that JetBlue will be the winning suitor consistent with its Spirit upgrade last month.


  • According to JPMorgan, the European aviation sector is currently struggling to cope with the underlying recovery in demand for air travel post Covid-19. Supply-side constraints are manifesting themselves through 1) staffing shortages, impacting airlines, airports, and suppliers, and 2) industrial action, albeit in isolated pockets for now. Looking ahead, the bank believes the risk lies to the downside for further disruption and subsequent capacity cutbacks through the peak demand season. Beyond the summer, JPMorgan thinks the picture looks increasingly worrisome if inflationary pressures on costs add to demand pressures on revenue.
  • Chinese airlines have recorded deep quarterly losses in the second quarter of 2022. Companies are citing Covid-19 resurgence and pandemic controls as the major reasons for large losses in the first half of the year, while rising oil prices and Rmb depreciation also weigh on earnings. Air China underperformed within the Big 3 airlines, dragged by the pandemic controls in Beijing as well as investment loss from Cathay Pacific.
  • The Federal Aviation Administration (FAA) has warned that the upcoming Boeing 737 MAX 10 certification is unlikely to be completed by the end of the year. Failure to get the aircraft approved by year end could become an issue for Boeing given directives drawn up by Congress in 2020, which reformed how the FAA certifies new planes and imposed new safety standards for flight deck alerts.

Emerging Markets


  • The best performing country in emerging Europe for the week was Hungary, gaining 6.7%. The best performing country in Asia this week was India, gaining 4.3%.
  • The Polish zloty was the best performing currency in emerging Europe this week, gaining 2.4%. The South Korean won, was the best performing currency in Asia this week, gaining 0.9%.
  • Taiwan export orders jumped by 9.5% from a year earlier to $58.8 billion in June, following a 6% rise in the prior month and beating market forecasts of a 5.6% expansion.


  • The worst performing country in emerging Europe for the week was Russia, losing 0.9%. The worst relative performing country in Asia this week was Thailand, gaining 1.3%.
  • The Turkish lira was the worst performing currency in emerging Europe this week, losing 3.4%. The Pakistani rupee, was the worst performing currency in Asia this week, losing 7.7%.
  • Preliminary July Manufacturing PMI for the Eurozone unexpectedly crossed below the 50 mark which separates growth from contraction. The July number was reported at 49.6, below the expectation of 51 and below June’s reading of 52.1.


  • Russia and Ukraine signed a deal that will allow the resumption of grain exports through the Black Sea. Ukraine is the fifth largest exporter of wheat. The blockade in the Black Sea sent prices up by 60% in 2022 alone and allowing Ukrainian exporters to start shipping again should help bring prices back down again. This is the first major agreement between the two sides since Moscow attacked Ukraine on February 24.
  • The Nord Stream 1 (NS1) pipeline that exports gas from Russia to Germany restarted its operations at 40% capacity after the scheduled maintenance period ended on Thursday. News of gas flowing again was welcomed in the Eurozone as extremely hot temperatures in Europe are boosting the EU’s need for cooling and electricity.
  • Bloomberg economists predict the final July Manufacturing PMI to remain above the 50 level when announced on July 30. Expectations are for Manufacturing PMI to come in at 50.1. Final Caixin PMI will follow a day later, on July 31.


  • Property developers in China are struggling to complete projects while a growing number of homebuyers are threatening to stop making their mortgage payments for stalled property projects. China may allow homebuyers to temporarily stop making mortgage payments on unfinished projects without incurring penalties. The real estate industry is a key economic sector in the Asian nation, which contracted 7% in the second quarter, the National Bureau of Statistics said in a report. More trouble among developers could slow down economic growth and put pressure on the banking system.
China's Property Sector Remains Drag on Economy
  • Additional lockdowns in mainland China could be around the corner as officials struggle to contain the spread of the Omicron Covid strain. FactSet reports that 41 Chinese cities are under some kind of lockdown currently, covering 264 million people in regions that account for 18.7% of GDP. This is compared to 31 cities covering 247.5 million people and 17.5% of GDP just last week.
  • The European Central Bank (ECB) delivered a hawkish surprise this week. All policy rates were hiked 50 basis points, which took the deposit rate up to 0%. The swaps market is now pricing in 150 basis points of tightening over the next 24 months that would see the deposit rate peak near 1.5%, BBH Global Currency Strategy commented this week.
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Energy & Natural Resources


  • The best performing commodity for the week was natural gas, up 18.57%. This is the commodity’s third consecutive weekly gain as scorching temperatures across the country boost air-conditioning demand. Higher-than-normal temperatures are predicted from Texas to the Northeast throughout next week.
  • U.S. natural gas consumption was up 5% (up 3.6 billion cubic feet per day [Bcf/d]) year-over-year this past week on the back of higher power demand (up 3.8 Bcf/d), partially offset by lower industrial demand. Total demand was 1.4 Bcf/d higher week-on-week, also driven by higher power demand (up 1.1 Bcf/d).
  • Russia is resuming supplies of gas via a major pipeline to Europe on Thursday, the pipeline operator said, amid concerns Moscow would use its vast energy exports to push back against Western pressure over its invasion of Ukraine, explains Reuters. The resumption of the Nord Stream 1 pipeline, at reduced capacity following a 10-day maintenance break, comes after comments from Russia’s foreign minister show the Kremlin’s goals had expanded during the five-month war.
Natural Gas Prices Are Starting to Move Up Again


  • The worst performing commodity for the week was lumber, down 9.99% as builders are still carrying at current price levels. June brought an 8% decrease in drilling permits, led again by declines in the Permian (down 158, -11% month-on-month). June has historically reported an increase from May regarding permitting activity, increasing on average 16% over the last five years, with 2021 as the only decline of 6%.
  • Crude prices continue to hover around $100. The market’s focus remains on recession risks. June inflation reports have raised market expectations of a 100-basis points interest rate hike in the next Federal Open Market Committee (FOMC) meeting scheduled for July 26-27. Meanwhile, China’s economic growth has slowed in the second quarter at 0.4%, the weakest since the first month of the pandemic, which further weighs on the oil demand outlook.
  • China’s crude steel output retreated 3% month-on-month and year-on-year to 90.73 million mt in June after rising for three straight months, National Bureau of Statistics data showed on July 15. Pig iron output slipped 1.3% month-on-month to 76.88 million mt in June but remained the second highest on record as production rose 0.5% year-on-year. Pig iron output fell 4.7% year-on-year to 438.93 million mt in the first half of 2022, while crude steel production declined 6.5% year-on-year to 526.88 million mt over the same period.


  • Japanese Prime Minister Fumio Kishida said he asked for as many as nine nuclear reactors to be online this winter to help with an expected power crunch. “There are concerns about a power shortage this winter,” Kishida told a news conference Thursday. “We must prevent this situation.”  The Ministry of Economy, Trade and Industry will do what it can to push for the nine reactors operating in winter, which can cover roughly 10% of Japan’s power consumption, said Kishida.
  • Ford has taken the strategic steps to secure enough battery materials to build 600,000 electric vehicles per year by 2023. In addition, the company has opted to utilize LFP batteries (the precursor materials are cheaper to source versus nickel or cobalt). For mass production, LFP will likely lead the way in the U.S., but high-performance batteries will still be needed for high-end uses. Automobile mobility for the masses needs to be affordable to make it adoptable.
  • Schlumberger noted that annual sales will rise the most in 11 years as concerns over inadequate energy supplies outweighs recessionary fears. Citing its biggest jump in demand in more than a decade for its services could drive revenue to at least $28 billion. The company is seeing demand for services on both land and sea and in almost every corner of the globe.


  • Electricite de France SA’s nuclear output cuts are expected to stretch into next week as a heat wave sweeping across Europe pushes river temperatures higher, restricting EDF’s ability to cool its plants. The French utility said that two power stations on the Rhone River will produce less electricity in the coming days, adding to cutbacks at another plant caused by rising temperatures on the Garonne. The restrictions threaten to push power prices — already at eye-watering levels — even higher, with the effects rippling out to other European markets
  • Goldman estimates a net 117kt softening impact (< 0.5% of global demand) on the copper balance from a sustained 0% flow outcome, which would adjust the market from base case modest deficit over the remainder of the year to close to balanced. This equates to 5% downside to copper price. For aluminum, under 0% flow outcome they see a modest net tightening impact of 26kt (< 0.01% of global demand) compared to their base case. This reflects the likelihood of material smelter supply cuts under a full curtailment as well a higher share of consumption linked to high economic value and low-gas intensive sectors such as construction and transport.
  • Morgan Stanley’s copper price forecast has been downward sloping for some time, and so far, it has not been low enough – with the price closer to its fourth quarter bear case of $7,000/t. Most of the correction has been demand driven, coinciding with 1) Shanghai going into lockdown, 2) strong U.S. inflation prints, driving higher rate expectations, and 3) recession fears rising plus a strengthening U.S. dollar. However, much of Morgan Stanley’s bearish thesis is centered on supply growth to come, which arguably has not really played out yet.

Luxury Goods


  • Tesla Inc. reported second quarter earnings that beat Wall Street estimates. The market leader in electric vehicles posted adjusted earnings of $2.27 a share, beating analysts’ expectations for $1.83 a share, based on an average of estimates compiled by Bloomberg.
  • Richemont, a producer and distributor of luxury jewelry, watches, and leather goods, reported a revenue beat and strong free cash flow generation despite inventory replenishment. Sales in China account for 23% of the company’s revenue, and Bank of America sees an improving situation in the mainland.
  • Cettire, a luxury online retailer, was the best performing S&P Global Luxury stock for the week. Shares gained 39.5% over the past five days, attempting to recover a steep year-to-date price correction.


  • Initial jobless claims in the United States unexpectedly increased to 251,000 from 244,000. Continued claims jumped to 1,384,000 from 1,331,000.
  • The S&P Global U.S. Service PMI unexpectedly crossed below the 50 mark separating growth from contraction. The preliminary reading for July was reported at 47.0 versus expected 52.7.
  • Chinese electric car maker NIO Inc. was the worst performing S&P Global Luxury stock for the week, losing 7.1%. Shares of the company declined more than 6% in a single day on Friday. Bloomberg reports that the Law Offices of Howard G. Smith announced an investigation on behalf of NIO investors concerning the company’s possible violations of federal securities laws.


  • General Motors Co. will start selling a battery-powered Chevrolet Blazer next year, competing with Tesla’s Y model, Bloomberg reports. The electric Blazer model will go on sale in the summer of 2023, following the launch of the Chevy Silverado EV, with the $30,000 Equinox coming later in the year. The three vehicles will kick off GM’s long-awaited effort to establish this type of lead in mass-market EV sales.
  • Porsche argues it stands out among luxury car makers because of its high volume. The brand sold 301,915 vehicles last year, compared with Ferrari’s 11,155 and the 6,178 autos shipped by Aston Martin Lagonda Global Holdings Plc. Porsche is resilient when it comes to profitability, with the unit’s operating margins coming in at an average of 16.1% in the five years through 2021, according to a presentation seen by Bloomberg. The early IPO meetings were held in Frankfurt, London, New York, and Boston.
Luxury Share
  • Luxury shoemaker Manolo Blahnik announced Tuesday that it has won a 22-year legal battle in China over a trademark dispute. The dispute started when a competitor started calling itself “Manolo & Blahnik” in 1999. The brand plans to start selling its shoes in China next year, Ms. Blahnik told the Financial Times newspaper. Blahnik’s creations are known the world over, especially after they were one of the luxury accessories featured in the hit television series “Sex and the City.”


  • According to Douglas Elliman Chairman Howard Lorber, the strong U.S. dollar is delaying the return of international buyers to New York’s luxury housing market. Foreign buyers mostly disappeared from NYC and the broader U.S. market when the pandemic shut down international travel. With borders reopening, those home shoppers are able to return, although they are now facing currency headwinds.
  • The U.S.-based luxury brand Coach is reportedly looking to raise prices of product lines globally, with an average increase of -8%. The price of some handbags could be boosted by 10%, reported 21st Century Business Herald. Coach denied the rumor that prices of products in China will jump by 20%, but said it plans to start a global price adjustment from July 15 due to rising material costs and freight expenses. Overall, the average price of luxury goods has hit a four-year high, which climbed by 7% compared to 2020’s average rate.
  • The Indian luxury car market has huge growth potential but remains suppressed due to high taxation on luxury cars and an unfavorable regulatory environment, as per a senior executive of German luxury carmaker Audi. Luxury car volumes account for less than 2% of the overall passenger vehicle sales annually and the sector has been more-or-less at the same level for the past decade.

Blockchain and Digital Currencies


  • Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Martin Shkreli, rising 714.06%.
  • Bitcoin rallied amid a broad, risk-on mood in global markets, trading above $22,000 for the first time since June 8 and testing the upper bound of the tight range where it’s been stuck for the past month. Cryptocurrencies’ resilience in the face of seemingly damaging news like last week’s worse-than-expected U.S. inflation report adds to indications that the selloff that lopped some $2 trillion off digital assets may have run its course, writes Bloomberg.
Breaking the Range - Bitcoin Has Failed to Consistently Break Above $22,000 Lately
  • Marathon Digital shares surged as much as 36% on Monday, reports Bloomberg, its biggest gain since February 2021. The move led a jump in cryptocurrency-related stocks as Bitcoin climbed above $22,000 to touch its highest level in about a month. Other crypto stocks that moved higher included Riot, Hut 8, Coinbase, and Hive Blockchain, just to name a few, the article continues. 


  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week was Loop X Network, down 99.96%.
  • Mike Novogratz, the billionaire investor who once called himself the “Forrest Gump of Bitcoin,” said the recent turbulence in the cryptocurrency industry is a “full-fledged credit crisis” and acknowledged that he was “darn wrong” about the magnitude of the leverage in the system. “What I don’t think people expected was the magnitude of losses that would show up in professional institutions’ balance sheets and that caused the daisy chains of events,” Novogratz said at the Bloomberg Crypto Summit Tuesday, writes Bloomberg.
  • Crypto Exchange Zipmex who operates in markets like Singapore and Thailand has halted withdrawals “until further notice” writes Bloomberg. The company cites “volatile market conditions, and the resulting financial difficulties our key business partners”.


  • French Bank BNP Paribas is entering the crypto custody space via a partnership with Swiss digital asset safekeeping firm Metaco. Metaco, which recently inked a custody tech deal with French bank Societe Generale, is becoming the go-to provider for banks and institutions looking to enter the crypto space, according to
  • Silvergate Capital Corp. said deposits from digital currency customers held steady in the second quarter, a sign that the bank and its clients are weathering the cryptocurrency rout, writes Bloomberg. Deposit resilience could help undo some of the damage suffered by some of the best-known crypto bank stocks in the first half of this year, the article explains.
  • Retail Traders, responsible for the wild price swings in everything from GameStop to Revlon have returned to another old favorite, beaten-down cryptocurrency stocks. Over the last 10 days the group has scooped up nearly $1 billion worth in shares of crypto-exposed companies, writes Bloomberg.


  • South Korean financial regulators are probing abnormal foreign-exchange transactions at some of the country’s largest commercial banks for any links to money laundering or currency speculation using crypto assets. Some of the transactions involved crypto exchanges, according to a senior Financial Supervisory service official who asked not to be name due to the sensitivity of the investigation, writes Bloomberg. 
  • U.S. authorities arrested a former Coinbase Global Inc. product manager for allegedly leaking insider information to help his brother and a friend buy tokens just before they were listed on the crypto exchange. Wahi tipped off his brother Nikhil Wahi, and a friend Sameer Raminin, when tokens were about to be listed by the exchange. Nikhil Wahi and Raminin, who are also subjects of the government’s investigation, allegedly used that information to trade dozens of tokens from at least June 2021 until April 2021 for a profit of more than $1 million, reports Bloomberg. 
  • South Korean prosecutors raided the home of Terraform Labs co-founder Daniel Shin, deepening a probe into allegations of illegal activity behind the collapsed stablecoin TerraUSD. A series of raids on the crypto-exchange and offices on Wednesday also included Shin’s home and his payment app Chai Corp., the Seoul Southern District Prosecutors Office said, as reported by Bloomberg.

Gold Market

This week gold futures closed at $1,740.50, up $18.30 per ounce, or 1.06%. Gold stocks, as measured by the NYSE Arca Gold Miners Index, ended the week lower by 0.51%. The S&P/TSX Venture Index came in up 4.03%. The U.S. Trade-Weighted Dollar slid 1.37%.

Date Event Survey Actual Prior
Jul-19 Eurozone CPI Core YoY 3.7% 3.7% 3.7%
Jul-19 Housing Starts 1,580k 1,559k 1,519k
Jul-21 ECB Main Refinancing Rate 0.250% 0.500% 0.000%
Jul-21 Initial Jobless Claims 240k 251k 244k
Jul-25 Hong Kong Exports YoY -4.0% -1.4%
Jul-26 Conf. Board Consumer Confidence 96.0 98.7
Jul-26 New Home Sales 670k 696k
Jul-27 FOMC Rate Decision 2.50% 1.75%
Jul-28 Germany CPI YoY 7.4% 7.6%
Jul-28 GDP Annualized QoQ 0.4% -1.6%
Jul-28 Eurozone CPI Core YoY 3.9% 3.7%


  • The best performing precious metal for the week was palladium, up 10.31% as demand in China appears to be picking up with the reopening of its automobile sector. GCM Mining released second quarter production results that beat quarterly production estimates, reporting 53,198 ounces of gold produced compared to consensus of 50,600 ounces. Full-year production may meet company guidance of 210,000-225,000 ounces of gold.
  • Newcrest Mining reported its June quarter production of 637,000 ounces, better than consensus of 594,000 ounces. The stronger production performance was driven by improved throughput and grades at both Cadia and Lihir.
  • Marathon Gold provided an update on the completion of several important stakeholder agreements and permitting milestones concerning the development of the Valentine Gold Project in central Newfoundland. These updates include 1) the completion and signing of a benefits agreement between Marathon and the province of Newfoundland and Labrador, 2) the completion and signing of an outfitter environmental effects monitoring plan between Marathon and the Newfoundland and Labrador Outfitters Association, 3) receipt of the project’s surface lease, and 4) the completion and acceptance of a provincial environmental preview report for the project’s powerline, and its release from provincial environmental assessment. 


  • The worst performing precious metal for the week was silver, down 0.53% with a relatively flat trading range. RBC expects a negative reaction from Wesdome shares following second quarter production results, which came in at 26% consensus due to operational issues that appear one-time in nature. At Eagle River, output was impacted by issues with a new hoist rope and leach tank resulting in unscheduled downtime, which has now been resolved. In addition, at Kiena, the ongoing ramp-up was impacted by supply chain delays related to key electrical components.
  • Superior Gold Inc. shares fell on Tuesday morning after the
    company said rainfall and increased cases of Covid-19 in Western Australia
    dampened second-quarter gold production. The precious metals miner said gold output in the period fell 21% from the prior-year period to 15,196 troy ounces, as it faced unusually high rainfall in May and more cases of Covid following the removal of pandemic measures in April.
  • Anglo American Platinum reported second quarter 2022 production, which at the asset level was a miss versus consensus: 923,000 ounces of platinum in concentrate was 4% below consensus and 618,000 ounces palladium was 8% below consensus. More impactful, 935,000 ounces refined platinum output was 14% below consensus and 603,000 ounces refined palladium was 19% below consensus.


  • Stifel visited Moneta’s Tower Gold project just east of Timmins, ON. Stifel was impressed by the consistency of mineralization over the 4km of trend at the Golden Highway portion with an understanding of multiple areas for the resource to continue to grow at depth and in continued step out. With increased focus on modeling at Garrison, the group also sees excellent potential for additional underground resources at the 903 deposit and in the sediments at depth and along trend at Garrcon.
  • According to RBC, valuations for junior miners have approached lows not seen since 2015 when gold was $500 per ounce lower at $1,200 per ounce and copper was $1.00 per pound lower at $2.25 per pound, with valuations down 35% year-to-date (to $29 per ounce in the golds and down 27% to $0.04 per pound in the base metals). This comes on the back of declining commodity prices and rising cost concerns around project study updates, which have crushed the sector.
  • Retail traders are flocking to the momentum in the U.S. dollar. Shawn Cruz, director of product strategy at TD Ameritrade noticed retail clients are “hyper focused” on the strength of the dollar. Bullish bets on the dollar have garnered a cult-like following among retail traders online. Perhaps it’s the correction in Bitcoin that has traders seeking new returns now that interest rates are no longer zero. That could mean the dollar could get pushed to unreasonable levels but likewise who is the next logical buyer when retail is at the helm? Economic weakness could trigger a switch to gold.


  • Gold is heading into the second half of 2022 under increasing pressure, reports Bloomberg, with the dollar more than ever the dominant driver. One gauge of the greenback hit an all-time high on July 14, the article explains, and bullion priced in dollars fell to its weakest intraday level in more than 15 months on Thursday (with the inverse correlation between the two assets around the strongest level since September). Head of real asset strategy at Wells Fargo, John LaForge, says that while real rates can be a strong driver of gold at times, that’s not the case now.
Gold's Inverse Correlation to Dollar Remains Strong
  • UBS calculates that Barrick’s second quarter earnings per share (EPS) will likely come in below Street estimates, based on details released in the preliminary production report. Second quarter gold sales volumes of 1.04 thousand ounces were slightly below consensus of 1.07 thousand ounces on implied cash costs of $857 per ounce versus consensus of $791 per ounce. The group’s preliminary calculations imply second quarter EPS of $0.22 per share versus the Street’s $0.28 per share. 
  • According to UBS, pressure has built into the June quarter for Australian gold miners with up to 30% quarter-over-quarter improvements required to get to the low end of guidance. Risks have increased through the year as their Perth trip highlighted: tight labor markets, supply chains and inflation rates up 10-15% and the lifting of Covid-19 border controls in March only exacerbating problems, not improving them.

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This commentary should not be considered a solicitation or offering of any investment product. Certain materials in this commentary may contain dated information. The information provided was current at the time of publication. Some links above may be directed to third-party websites. U.S. Global Investors does not endorse all information supplied by these websites and is not responsible for their content. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of (06/30/22): 

  • GCM Mining
  • Wesdome Gold Mines
  • Superior Gold
  • Franco-Nevada Gold Corp.
  • Barrick Gold Corp.
  • American Airlines
  • United Airlines
  • Deutsche Lufthansa
  • easyJet PLC
  • Ryanair Holdings PLC
  • Air France KLM
  • Airbus SE
  • Air China
  • Spirit Airlines
  • Frontier Group Holdings
  • JetBlue Airways Corp.
  • United Airlines
  • Cathay Pacific Airways
  • Boeing Co/The
  • Tesla Inc.
  • Porsche
  • Richemont NIO Inc

*The above-mentioned indices are not total returns. These returns reflect simple appreciation only and do not reflect dividend reinvestment.

The Dow Jones Industrial Average is a price-weighted average of 30 blue chip stocks that are generally leaders in their industry. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The Nasdaq Composite Index is a capitalization-weighted index of all Nasdaq National Market and SmallCap stocks. The Russell 2000 Index® is a U.S. equity index measuring the performance of the 2,000 smallest companies in the Russell 3000®, a widely recognized small-cap index.

The Hang Seng Composite Index is a market capitalization-weighted index that comprises the top 200 companies listed on Stock Exchange of Hong Kong, based on average market cap for the 12 months. The Taiwan Stock Exchange Index is a capitalization-weighted index of all listed common shares traded on the Taiwan Stock Exchange. The Korea Stock Price Index is a capitalization-weighted index of all common shares and preferred shares on the Korean Stock Exchanges.

The Philadelphia Stock Exchange Gold and Silver Index (XAU) is a capitalization-weighted index that includes the leading companies involved in the mining of gold and silver. The U.S. Trade Weighted Dollar Index provides a general indication of the international value of the U.S. dollar. The S&P/TSX Canadian Gold Capped Sector Index is a modified capitalization-weighted index, whose equity weights are capped 25 percent and index constituents are derived from a subset stock pool of S&P/TSX Composite Index stocks. The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver. The S&P/TSX Venture Composite Index is a broad market indicator for the Canadian venture capital market. The index is market capitalization weighted and, at its inception, included 531 companies. A quarterly revision process is used to remove companies that comprise less than 0.05% of the weight of the index, and add companies whose weight, when included, will be greater than 0.05% of the index.

The S&P 500 Energy Index is a capitalization-weighted index that tracks the companies in the energy sector as a subset of the S&P 500. The S&P 500 Materials Index is a capitalization-weighted index that tracks the companies in the material sector as a subset of the S&P 500. The S&P 500 Financials Index is a capitalization-weighted index. The index was developed with a base level of 10 for the 1941-43 base period. The S&P 500 Industrials Index is a Materials Index is a capitalization-weighted index that tracks the companies in the industrial sector as a subset of the S&P 500. The S&P 500 Consumer Discretionary Index is a capitalization-weighted index that tracks the companies in the consumer discretionary sector as a subset of the S&P 500. The S&P 500 Information Technology Index is a capitalization-weighted index that tracks the companies in the information technology sector as a subset of the S&P 500. The S&P 500 Consumer Staples Index is a Materials Index is a capitalization-weighted index that tracks the companies in the consumer staples sector as a subset of the S&P 500. The S&P 500 Utilities Index is a capitalization-weighted index that tracks the companies in the utilities sector as a subset of the S&P 500. The S&P 500 Healthcare Index is a capitalization-weighted index that tracks the companies in the healthcare sector as a subset of the S&P 500. The S&P 500 Telecom Index is a Materials Index is a capitalization-weighted index that tracks the companies in the telecom sector as a subset of the S&P 500.

The Consumer Price Index (CPI) is one of the most widely recognized price measures for tracking the price of a market basket of goods and services purchased by individuals. The weights of components are based on consumer spending patterns. The Purchasing Manager’s Index is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment. Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.

The U.S. dollar index (USDX) is a measure of the value of the U.S. dollar relative to a basket of foreign currencies.

The Nasdaq 100 Index is a basket of the 100 largest, most actively traded U.S companies listed on the Nasdaq stock exchange.

The S&P Global Luxury Index is comprised of 80 of the largest publicly-traded companies engaged in the production or distribution of luxury goods or the provision of luxury services that meet specific investibility requirements.