China’s stimulus package proves that the global infrastructure boom is not dead, says Justice Litle. And that’s big news for base metals like copper. These are essential for construction, and will soar as the world attempts to rebuild its economy. That makes strong base metal producers a bargain now.

In the energy market Monday, oil sank below the $60 benchmark, with crude for December delivery closing at $59.33/barrel, down $3.08. December reformulated gasoline lost 6.2 cents, to $1.3059/gallon.  Early in the day, crude had fallen to $58.32, its lowest level since February, 2007, and yesterday there weren’t enough buyers to push it back over $60.

With gross domestic product plummeting and the jobless rate at a 14-year high, U.S. policymakers will have to author at least one more stimulus package in the months to come if they are to elbow aside the impact of high unemployment and depressed consumers.

In the currency market, the dollar edged lower against the euro. Late Monday, the euro was trading at $1.275 vs. $1.2712 on Friday. China’s state-run news agency, Xinhua, said that the government’s stimulus program will “will loosen credit conditions, cut taxes and embark on a massive infrastructure spending program in a wide-ranging effort to offset adverse global economic conditions by boosting domestic demand.”

Gold had itself a real seesaw day yesterday, poking about $15 higher by the time New York opened, really taking off and rising as high as $768 in the first hour, but then encountering a steep falloff that dropped it nearly to $740 by noon, after which it edged higher again and leveled off to finish at $744.70, up $10.80 from Friday. Overnight, gold has slipped lower.

President elect Barack Obama is expected to move quickly to try and revive the US economy. Theo Casey says a new fiscal stimulus will be targeted at job creation and infrastructure building instead of free handouts. However, it still won’t stop the recession. And it will add even more zeros to Treasury debt.

More losses… Currencies rebound… Jumping off the bandwagon…  Slowing renminbi appreciation? And Now… Today’s Pfennig!

Citigroup has slashed its earnings outlook for Wall Street investment banks Goldman Sachs Group, Lehman Brothers Holdings and Morgan Stanley because of a tough operating environment, according to a report by Thomson Reuters.

The second quarter has seen lower client-related trading volumes, little banking activity, losses related to ineffective hedging and reversals of gains on fair valuing liabilities, [Citigroup analyst] Prashant Bhatia wrote in a note dated May 16.