Base Metals Move Higher
Aug 28th, 2008 | By Doug Casey | Category: Financial News, Gold MarketThe base metals were mostly in positive territory on Wednesday. Copper was up sharply to mid-morning before tailing off, but still finished with a gain at $3.5031/lb., up more than 3½ cents.
Nickel pushed higher through most of the day, closing at $9.3455/lb., up more than 30 cents. Zinc was down in the pre-dawn hours but recovered nicely, ending at $0.8144/lb. up more than 2 cents. Aluminum traded jaggedly, finally dropping a third of a cent to $1.2317/lb., while lead shot higher all day long, adding 8½ cents to its intraday high of $0.9342/lb.
The industrial metals were mostly higher on the back of the increase in energy, as traders sought them as hedges against inflation.
The falling dollar and the surprising rise in durables orders also factored in.
The latter “adds fuel to the fire and is playing into the bullish sentiment today that is helping copper,” said Michael Gross, an analyst at OptionSellers.com in Tampa, Florida.
However, Gross added, this could be a “short term bounce.”
“Things in the euro-zone are looking pretty bad,” he said. “Though the dollar is weaker today, we expect that it will resume its gain against the euro and that will pressure copper longer term.”
Meanwhile, lead posted its biggest gain in six weeks as traders decided to load up at depressed price levels. Previously, lead had fallen 27% so far this year, the worst performance among the base metals.
But things may be turning around, as evidenced by the fact that China, the largest producer of lead, became a net importer in July, indicating strong demand for the metal in its domestic market. Refined lead imports rose 137% last month in July, from the year ago period, according to customs data.
LME-tracked lead inventories fell 3,050 tons, or 3.5%, to 83,375 tons yesterday. That’s the lowest level since June 16.
Source: Base Metals Move Higher
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