Why Bulls Are Out On Base Metal ETFs
August 6th at 6:00am by Tom Lydon
Base metal exchange traded funds (ETFs) have rallied more than 55% off the market’s March 9 low thanks to a combination of factors, including more demand from China and a weakening dollar.
Among the factors leading to strength in commodities in general, and base metals in particular, include:
- Global stock markets are feeling more positive, thanks to eurozone economic sentiment and China’s promise to maintain a growth-friendly economic policy, reports Barani Krishnan and Rebekah Curtis for Reuters.
- Manufacturing in China is picking up the pace, while it’s stabilizing in the United States, writes Angel Commodities for Commodity Online.
- One analyst noted that China alone helped copper gain 15% last month, and 80% overall this year, says Nidhi Sharma for the Economic Times.
- A weakening dollar is adding an extra lift to the demand for major base metals, such as aluminum, copper, nickel, zinc and lead, Sharma notes.
- PowerShares DB Base Metals (DBB): up 57.5% year-to-date
For more stories about base metals, visit our base metals category.
