Metals Mania!
Gold is at $720 per ounce, a jump of more than 20% in a month.
Copper is at about $4 per pound, and has doubled in 4 months.
Platinum is at $1350, up 20% in a month.
The story is the same for other metals.
A top executive at Codelco, the Chilean Copper Giant and the world's biggest copper producer the other day said: It doesn't make sense that something which costs us $0.7-$1 per pound to produce is selling at $4 per pound. New competitors will come in, he said, and these price levels are unsustainable.
The metals market is entering a crazy momentum buying phase. Will this end badly for the investor? Not necessarily. There are fundamental reasons for higher prices for these commodities (demand is going up but there isn't any new supply coming in for years) and the prices have the staying power for years to come. People fail to realize that stocks and prices of commodities can climb up and stay there, stay flat; they don't need to collapse. Statistics show that Markets (for anything) trade sideways most of the time; big up and down moves are made in relatively short periods of time.
There are people talking about Gold going to $1000 next year. Some are even saying it will hit that number in 3 months!
If Codelco officials can't predict where the prices would be (the executive said that a couple of years ago they never imagined a price of $4 per pound for the metal), is there much to believe when analysts at a brokerage firm, an independent research firm, etc. come up with a price target?
The metallic bull is on and strong, and no one knows where it stops. But thinking that it will end in a collapse is not right; prices can touch $1000 for Gold and then stay there for a decade.
Sanjay John G.
Copper is at about $4 per pound, and has doubled in 4 months.
Platinum is at $1350, up 20% in a month.
The story is the same for other metals.
A top executive at Codelco, the Chilean Copper Giant and the world's biggest copper producer the other day said: It doesn't make sense that something which costs us $0.7-$1 per pound to produce is selling at $4 per pound. New competitors will come in, he said, and these price levels are unsustainable.
The metals market is entering a crazy momentum buying phase. Will this end badly for the investor? Not necessarily. There are fundamental reasons for higher prices for these commodities (demand is going up but there isn't any new supply coming in for years) and the prices have the staying power for years to come. People fail to realize that stocks and prices of commodities can climb up and stay there, stay flat; they don't need to collapse. Statistics show that Markets (for anything) trade sideways most of the time; big up and down moves are made in relatively short periods of time.
There are people talking about Gold going to $1000 next year. Some are even saying it will hit that number in 3 months!
If Codelco officials can't predict where the prices would be (the executive said that a couple of years ago they never imagined a price of $4 per pound for the metal), is there much to believe when analysts at a brokerage firm, an independent research firm, etc. come up with a price target?
The metallic bull is on and strong, and no one knows where it stops. But thinking that it will end in a collapse is not right; prices can touch $1000 for Gold and then stay there for a decade.
Sanjay John G.
0 Comments:
Post a Comment
Links to this post:
Create a Link
<< Home