China Goes to Copper Currency Standard
A really bad idea from the Financial Post:Gold: longest losing streak since August. AND: "Metal Maneuvering: Copper Yea, Gold Nay"Switch from base metals to precious metals
In a dramatic shift from the fall, the base metals have greatly outperformed the precious metals in recent weeks. Copper in particular is up more than 50% from the bottom. But can it really last? Genuity Capital Markets analysts Tony Lesiak, Nawojka Wachowiak and Michael Gray don't think so....
It's been 36 days since we posted "Gold & silver vs. copper & uranium". Gold has been down for the last four weeks, copper up for the last five. Sometimes you get lucky. Sometimes a lot of time spent at the market pays off....Today's headline story from Bloomberg:
Copper prices gained the most in a week as a weaker dollar boosted demand for the commodity as a currency hedge and auto sales surged in China.
The U.S. Dollar Index, a six-currency gauge of the greenback’s value, fell as much as 1.6 percent. Copper has climbed 28 percent from the end of March as the dollar slumped 6.6 percent. Some traders buy commodities to preserve purchasing power when the U.S. currency slips. May vehicle sales rose 34 percent in China from a year earlier, an industry group said.
“We will see copper prices continue to rise on the dollar weakness story,” said Michael Pento, the chief economist at Delta Global Advisors Inc. in Holmdel, New Jersey. “The decline in the dollar will help all of the commodities.”
Copper futures for July delivery rose 11.25 cents, or 5 percent, to $2.3655 a pound on the New York Mercantile Exchange’s Comex division. That marks the biggest gain for a most-active contract since June 1. The price has surged 68 percent this year.
The metal may reach $2.75 a pound by the end of the year as inflation accelerates, said Pento, who in January correctly predicted copper’s 2009 rally....MORE