The rally in metals exchange traded products this year has been stoked by precious metals, namely gold and silver with some solid contributions from palladium and platinum. By comparison, industrial metals, such as copper, have been obvious laggards.
Many industrial metals and miners rallied on the belief that China would support growth through stimulus measures, augmenting demand for metals while enticing investors to jump back in. Moreover, the depreciating U.S. dollar made USD-denominated resources cheaper for foreign buyers. The ongoing global low-yield environment also pushed investors toward more attractive assets, like commodities.
However, some market observers believe demand from China simply is not strong enough to support near-term upside for copper prices.
Investors that want to position for a potential rebound in industrial metals without making a commitment to a single metal should consider the iPath Bloomberg Industrial Metals Subindex Tota Return ETN (NYSEArca: JJM).[related_stories]