Base Metals Slump
Jul 9th, 2009 | By Doug Casey | Category: Gold MarketThe base metals were all dripping red and plenty of it on Wednesday. Copper held steady until just before the New York open, then pitched forward on its face, with a slight late push off its intraday lows leading to a finish at $2.1411, down 7 cents.
Nickel followed exactly the same path, plummeting below the $7 mark to close at $6.7018/lb., down 33 cents. Zinc was also beaten down, ending at $0.6745/lb., down nearly 2½ cents. Aluminum took a severe pounding, shedding 2 2/3 cents, to $0.6881/lb., while lead plunged, losing more than 2½ cents, to $0.726/lb.
Copper led the industrial metals’ swoon yesterday, reaching a fresh two-week low, as grim projections for the global economy put traders in a sour mood.
The global economy will contract by 1.4% this year, a much deeper cut than that forecast in April, and a sustained recovery may be a year away, the International Monetary Fund said yesterday.
Global economic growth will rebound to 2.5% next year, the IMF said, but noted that a “sustained pickup in activity” won’t occur in the world’s advanced economies until the second half of 2010.
In addition, there was nothing positive out of the G-8 summit, and eurozone figures were awful, with the regional economy skidding 2.5% in the first three months of this year from the 4Q08. That was the steepest decline since record-keeping for the zone began in 1995.
“There’s a lot of anxiety again about the recovery,” said Matthew Zeman, of LaSalle Futures Group in Chicago. “Some of the most recent data has been pretty disappointing and we are in the slow season for copper as well, so a lot of that talk we heard several weeks ago about ‘green shoots’ have turned brown, so to speak.”
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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.