Base Metals Little Changed
May 13th, 2009 | By Doug Casey | Category: Gold MarketThe base metals were mixed on Wednesday. Copper rallied from the pre-dawn hours to mid-morning, but then gave it all back by day’s end to finish at $2.0599/lb., down just over a quarter-cent.
Nickel followed copper closely but didn’t fall as far, closing at $5.8423/lb., up more than a penny and three-quarters. Zinc had the same up and down day, ending at $0.6842/lb., down a third of a cent. Aluminum was little changed, shedding a quarter-cent, to $0.6774/lb., while lead used a very late rally to push higher, adding almost 2 cents, to $0.6666/lb.
Copper set the tone for a day of sharp ups and downs among the industrial metals, showing strength early but fading inexplicably even as equities were recovering lost ground. The metal had benefited early on after a report that the US trade gap widened in March, putting downward pressure on the dollar.
China factored in on the upside, as investment in factories and property climbed 30.5% in the four months through April, bettering economists’ forecasts. Additionally, imports of copper in China rose 7% in April, to a record high.
“Continued evidence of global economic recovery is important for confidence,” wrote Derek Halpenny, the London-based head of global currency research at Bank of Tokyo-Mitsubishi UFJ Ltd. “China is expected to play an important role in bringing about some of that recovery and the data from China today signaled some more positive developments.”
China’s economy will expand 7.8% this year, compared with a 2.5% contraction in the U.S., according to economists surveyed by Bloomberg.
Stockpile data continued to be supportive. Copper inventories monitored by the LME fell by 6,150 metric tons yesterday, to 379,025 tons.
However, “It looks to me now as if the markets are now pricing in a rapid recovery, that they’re pricing in a V-shaped recession, which I consider extremely unlikely,” Paul Krugman, Princeton University’s Nobel Prize-winning economist, said in Shanghai yesterday. “The market seems to be looking as if this is going to be an average recession, but it’s not.”
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.