Base Metals Up
Aug 7th, 2008 | By Doug Casey | Category: Financial News, Gold MarketIt was a good day for the base metals Wednesday as copper, zinc, nickel, and lead all rose, leaving aluminum as the only metal to fall on the day’s trading. Copper rose steadily for much of the day, reaching an intraday high of over $3.55/lb. A late-morning sell-off reduced the metal’s gains, however, as copper finished up only ½ cents, at $3.5042/lb.
Zinc traded within a 1 cent range all day, ultimately closing at $0.7935/lb., up ½ cents. After trading flat early on, nickel began rising for the day during the pre-dawn hours and eventually ended up more than 5 cents, at $7.9220/lb. Aluminum was up slightly for most of the day, but slipped back into the red during late-morning trading. Prices ultimately finished at $1.2930/lb., down ¼ cents. Lead posted strong gains on the day as prices shot up in the pre-dawn hours to close at $0.9409/lb., up almost 2 cents.
Copper prices rose after three consecutive losing sessions as the Fed’s decision Tuesday not to raise interest rates assuaged investors’ fears that a shrinking U.S. economy will cut demand for the metal.
“The market is deciding that things aren’t going to be so bad as the Fed is firmly targeting growth and saying they’re ready to act as needed to stimulate the economy,” stated Patrick Chidley of Barnard Jacobs Mellet.
Copper also benefited from the belief that the metal may have been oversold in the past couple of days and continued supply problems.
“Mine supplies are running behind because of labor unrest and other disruptions,” wrote Russel Croft of Croft-Leominster Inc. “The long- term supply and demand fundamentals for copper are favorable.”
Lead also posted large gains on the day on signs that stockpiles may be dwindling. Stockpiled lead set to leave warehouses rose to a 22-month high.
According to Gayle Berry of Barclays Capital, the “big jump in canceled warrants suggested we’re going to see stockpiles declining.”
This means that the lead market may be transitioning from a supply surplus to a deficit and that prices will most likely move up accordingly.
Source: Base Metals Up
Advertisement
The new Debt-Free Index CD is comprised of equal parts Singapore dollar, Japanese yen, Swiss franc, Australian dollar and Brazilian real. Why these currencies? All 5 economies have a strong balance of payments—a factor that could aid performance against the U.S. dollar.
Of the 5 economies, only Australia has a trade deficit—and the gap appears to be narrowing. Concerned about investing in a weak U.S. dollar? Consider this new Index CD, it is available in 3- and 6-month terms with a $20,000 minimum deposit. Apply today here
This CD is FDIC insured against bank insolvency, but please keep in mind that you could lose principal as a result of currency fluctuation.
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.