Base Metals Mostly Higher
May 27th, 2009 | By Doug Casey | Category: Gold MarketThe base metals were mostly in positive territory on Tuesday. Copper fell all through the pre-dawn hours, but once New York opened it was all on the opposite direction, as it finished just off its intraday highs at $2.1137/lb., up just short of 4 cents from Friday.
Nickel was flat until early New York trading, then took off, blasting past the $6 mark to close at $6.0267/lb., up almost 30 cents. Zinc was modestly lower at $0.6674/lb., down two-thirds of a cent. Aluminum edged higher, ending at $0.6426/lb., up nearly a half-cent, while lead added two-thirds of a cent, to $0.6428/lb.
Copper led the charge higher, as the big jump in consumer sentiment caused the market mood to turn on a dime. Earlier in the day, the metals had fallen, as the dollar strengthened and investors were worrying that world economies could take longer than expected to recover, driving down demand.
The U.S. Dollar Index, tracking the strength of the buck against 6 other currencies, was up nearly 1%. And that reduces the appeal of commodities as a hedge against inflation.
Overall, Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey, waxed enthusiastic, saying that, “This [report] is very positive, better than expected. I was looking for positive, but this is very solid. This is going to arrest any erosion we’ve seen in the (stock market) rally.”
Kenny added that, “This comes on top of the fairly negative home pricing number, but what comes out on top in terms of momentum is consumer confidence. It’s more relevant and closer to real time. Housing is more backward-looking.”
Stockpile data was supportive, as well. Copper inventories monitored by the LME declined 6,800 metric tons yesterday, to 326,575 tons.
However, some analysts have turned cautious, citing concerns about falling levels of canceled copper warrants, and some indications of slowing demand from China, the world’s leading copper consumer.
Canceled warrants of copper — material earmarked for delivery — fell to 47,625 metric tons from 52,875 tons on May 21 while, according to Bloomberg, “Reuters reported that China’s State Reserves Bureau sold copper in the past month and may put as much as 50,000 metric tons on the market, citing industry sources that said they were offered some of the metal.”
Source: Base Metals Mostly Higher
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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.