Base Metals Mixed
Jul 24th, 2009 | By Doug Casey | Category: Gold MarketBase metals were mixed on Thursday. Copper fell 1.25 cents to close at $2.4893/lb. Nickel gained just over 1 cent to finish at $7.2998/lb. Zinc lost almost one penny, ending at $0.7450/lb. Aluminum rose a cent and change, closing at $0.7798/lb., while lead moved to $0.7719/lb., down half a penny from the previous session.
Despite copper’s slight pullback, investors remain mostly bullish, encouraged by what they see as an improving outlook on demand and economic recovery.
“The overall sentiment in the metals market has improved a lot,” said Yingxi Yu, an analyst at Barclays Capital. “It has not much to do with the dollar, but follows stock markets closely, as the second quarter’s corporate earnings were broadly better than expected, improving outlook on the economy.”
Copper supply concerns also underpinned the bullish sentiment. Violence was reported near Freeport-McMoRan’s massive Grasberg mine in Indonesia, and a power problem occurred at Anglo American’s Chilean Collahuasi copper mine, but so far neither has reported serious production disruptions.
But with copper near nine-month highs some analysts and market participants warn not to get your hopes up too much just yet.
“Despite these supply-side concerns, we find it hard to make the case for anything approaching a runaway bull market in copper (or any of the metals for that matter) given the still sluggish rate of growth noted in most economies,” said analyst Edward Meir at MF Global.
“I don’t think copper prices climbed because of a dramatic improvement in supply-demand conditions,” said Koichi Kaku, general manager of Japan’s second-largest smelter of the red metal, Sumitomo Metal Mining Co. “I’m skeptical about a strong recovery in the market.”
Meanwhile, LME copper stockpiles rose again on Thursday, up 3,225 metric tons to a one-month high of 271,725 metric tons.
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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.