Base Metals All Lose
Aug 9th, 2008 | By Doug Casey | Category: Financial News, Gold MarketIt was another bad day for the base metals Friday as copper, nickel, aluminum, and lead all reversed their gains of the previous day’s session and zinc continued its downward spiral. Copper was hammered all day long, ending the damage only at the closing bell. The metal finished at $3.4234/lb., down over 11 cents.
Zinc fell sharply in early morning trading, recovering only slightly to close down 2 ¼ cents, at $0.7599/lb. Nickel was up early, but plunged back below the $8 barrier during a pre-dawn sell-off. Prices finished at $7.9939/lb., down more than 33 cents on the day. Aluminum fell steadily throughout Friday’s trading, with prices eventually settling just off their intraday low at $1.2718/lb., down almost 2 ½ cents. Lead, like the rest of the base metals, plunged during early morning trading, losing almost 6 ½ cents to end at $0.8951/lb.
Copper’s losses hinged on more concerns that an economic slowdown will affect demand for the metal.
Singapore lowered its growth predictions for 2008, forecasting a “bumpy year ahead,” while Italy announced that its economy shrank during the second quarter.
“People have gotten very worried about demand for commodities because of this global meltdown,” wrote Michael Smith of T&K Futures & Options. “If all these major economies are going to slow down, people think that’s really bad news.”
Falling crude prices also had an impact on the decline among the base metals.
Smith continued that “crude is the king of commodities…when oil drops, it brings everything else down with it.”
Copper’s slide this week represented its worst weekly drop since May of 2007.
Source: Base Metals All Lose
Advertisement
The global derivatives market has soared from just over $1 trillion to a staggering $272 trillion, according to the Bank of International Settlements.
What's more disturbing, is that nearly 1/3 of these derivatives are concentrated in the hands of just 3 American banks.
The scamble to deleverage has blown these banks' delicately balanced derivatives portfolios off their axis. World markets are now teetering on the brink of an unprecedented collapse.
But you can protect your portfolio - and potentially reap huge gains - by accessing "secret" financial opportunities that are set to soar when the derivatives bubble bursts...Click here to read more.
Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.