Base Metals Still Mired in Red
Aug 30th, 2008 | By Doug Casey | Category: Financial News, Gold MarketThe base metals were all in the red again on Friday. Copper dropped in the pre-dawn hours and, though it rallied through the New York session, never got back to even, finishing at $3.4242/lb., down more than 5 cents.
Nickel fell off a cliff in the pre-dawn hours, falling below the $9 mark, then came roaring back in New York before slipping again late to close at $9.1618/lb., down 3 cents. Zinc was a sharp up and down, ending little changed at $0.7967/lb., down three-quarters of a cent. Aluminum had a slow, steady slide, dropping to $1.2077/lb., down three-quarters of a cent, while lead was off steeply, shedding more than 3 cents, to $0.8955/lb.
Copper declined as traders’ concerns about rising stockpiles continued to drive the market.
Inventories monitored by the LME added to Thursday’s 2,200 metric ton gain by shooting up another 2,875 tons, to 173,375 tons. That’s a fresh 6-month high, and marks an increase of 57% since the end of April.
No question, “LME stocks are rising briskly,” said Edward Meir, of MF Global.
Also factoring in was the rally in the dollar, which will notch its biggest monthly gain against the euro since the European currency began trading in 1999. That strength has savage commodities, with the Reuters/Jefferies CRB Index down 5.5% in August.
“If the dollar’s climb resumes against the euro, we could see copper weakening at a faster clip as we start the new week,” Meir said.
There was also evidence of a slowing global economy from the International Copper Study Group, which reported that world copper usage increased only 0.2% in the five months ended May 31.
Source: Base Metals Still Mired in Red
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