Base Metals Mostly Lower
Jul 3rd, 2009 | By Doug Casey | Category: Gold MarketThe base metals were mostly lower on Thursday. Copper sank from the pre-dawn hours to mid-morning, bottoming at $2.24, but rallied back from there to finish at $2.2754/lb., down more than 3½ cents.
Nickel had a pair of jagged ups and downs to mid-morning, but blazed higher from there, closing just off its intraday highs at $7.4382/lb., up 13 cents. Zinc was also choppy, ending little changed at $0.6994/lb., down a half-cent. Aluminum was weak, dropping more than a penny, to $0.7267/lb., while lead also sagged, shedding more than a penny and three-quarters, to $0.7626/lb.
Copper led all the industrial metals but nickel downward yesterday, as traders heeded the strengthening dollar and were spooked by bad economic data from both the U.S. and Europe that served notice a global economic recovery could be a long time in coming.
“When you have these continued weak employment reports, yes, they show maybe we are bottoming out, but there is no turn in any of the data,” said Bill O’Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey.
In addition to the grim unemployment numbers domestically and in the eurozone, the market also reacted to comments from the ECB about the length of the recession. However, the better-than-expected orders for manufactured goods helped keep a cap on the metals’ losses.
O’Neill added that, “If you take China out of the buying side of the market, you wouldn’t have a lot there. It’s going to be difficult for the market to break out of the current trading range in the third quarter because of the fact that we don’t really see the kind of demand outside of china that the market needs to extend these levels.”
In company news, Rio Tinto (NYSE:RTP) did a massive re-financing. The world’s third-largest mining company sold about 97% of the London-listed shares (508.6 million) on offer in a $15.2 billion sale to reduce debt.
Rio rejected a $19.5 billion investment proposal from its biggest shareholder, Aluminum Corp. of China, last month, and went with the share sale and an iron ore joint venture with BHP Billiton (NYSE:BHP).
Source: Base Metals Mostly Lower
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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.