Base Metals Little Changed
Jun 11th, 2009 | By Doug Casey | Category: Gold MarketThe base metals were all red in the face on Wednesday. Copper was off in the pre-dawn hours, then traded mostly within a tight 2-cent range all day, finishing at $2.3213/lb., down just under 4½ cents.
Nickel pushed close to the $7 mark in the pre-dawn hours but then subsided, drifting slowly down to end at $6.7449/lb., down a half-cent. Zinc was modestly lower, closing at $0.7213/lb., down three-quarters of a cent. Aluminum was off sharply at mid-morning, and wound up shedding nearly 3 cents, to $0.7267/lb., while lead was also weak, dropping a penny and two-thirds, to $0.7685/lb.
Copper led the industrial metals lower, as analysts saw consolidation as the order of the day after the metal reached an eight-month high. Many now see it as having the momentum to stage a push to $2.50.
Any potential copper had to turn in a positive day, however, was probably restrained by the resurgence of the dollar.
The industrial metals also received support from a story in Hong Kong’s Ming Pao Daily, stating that the country’s industrial production likely rose by 8.9% in May from a year earlier. That would be bigger than April’s 7.3% increase and beat economists’ estimates of a 7.7% gain. The newspaper cited unidentified “market sources.” The government will release the official data this week.
In addition, Chinese consumer prices fell for a fourth month, making it easier for the government to maintain its “moderately loose” monetary policy to revive the economy. “Buying momentum is still strong as more signs point to a clear recovery of the economy,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance.
“China has done all the right things to support the domestic economy,” Fidelity’s Stephen Ma says. “I believe China’s GDP growth will continue to surprise people on the upside.”
And stockpiles prolonged their fall, with copper inventories monitored by the LME dipping by 2,075 metric tons yesterday, to 294,275 tons.
Source: Base Metals Little Changed
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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.