4 Things Powering Base Metals ETFs

March 16th at 12:00pm by Tom Lydon

Move over, gold. You’ve had your day in the sun. Right now, industrial demand from both developing and developed markets is powering a rally in base metal exchange traded funds (ETFs).

Last year was the Year of All Things Gold as the safe haven metal supplied investors with a shelter for the market turmoil. But rampant fear in the marketplace has abated, and a bigger risk appetite is the order of the day. That means markets are moving, countries are growing and they’re hunting down the materials they need to get it going:

Industrial demand for base metals is expected to take off as emerging economies continue to build up. It’s anticipated that the biggest beneficiaries of this will be aluminum, copper, nickel, lead and zinc, reports AAP on The Sydney Morning Herald.

Commodity Online reports that China and India are expected to be big catalysts for base metals prices, as both economies see more industrial growth this year. [A Guide to Investing in Metals ETFs.]

The U.S. dollar has been weakening, lending some support to these metal prices. As the dollar weakens, commodities priced in dollars will become cheaper for overseas buyers.

The world’s supply of copper is concentrated in Chile. Worries about supply have been reinforced by the large earthquake and interruptions in mine production, reports Rebekah Curtis for Reuters. [The State of Aluminum, Copper and Nickel ETFs.]

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