Base Metals Little Changed
Sep 9th, 2008 | By Doug Casey | Category: Financial News, Gold MarketThe base metals were mixed in listless trading on Monday. Copper showed a gain from the pre-dawn hours to the late morning in New York, but then fell off a cliff and finished at its intraday low at $3.1145/lb., down 3½ cents from Friday.
Nickel traded within a 15-cent range all day, closing at the low end but with a gain of 3 2/3 cents, to $8.4096/lb. Zinc ended at its intraday low, but with a slight gain at $0.7755/lb., up a quarter of a cent. Aluminum was up and down to little effect, as it lost a quarter-cent, to $1.1739/lb., while lead had a modest up day, adding a penny and a quarter, to $0.8174/lb.
Copper declined for the third straight session, pushing it down 27% from its May high, as bailout-ignited dollar rally drove traders out of commodities. Some of the other industrial metals showed gains, but all retreated from their intraday highs.
On the supply side, inventories monitored by the LME dropped slightly, down 50 metric tons to 200,825 tons. It was the first decline since August 20.
Analysts said that copper’s early strength represented the initial reaction to the bail out, which was positive, as traders hustled to cover shorts put on after last week’s sharp slide lower. But, as the day wore on and the dollar continued to strengthen, the metals’ appeal faded too.
The commodity selloff was general. The Reuters/Jefferies CRB Index was down, falling as much as 0.5% during the day. The index, which tracks 19 raw materials, was off 6.1% last week on concerns that the weakening global economic will mean a downswing in demand.
Still, some see a silver lining. The big bailout is “a major positive for the housing market, the economy and capital markets,” in the opinion of Michael Widmer, a London-based analyst at Lehman Brothers (NYSE:LEH). “Base-metals prices generally rose on the back of the intervention,” he wrote before the pullback.
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.