Industrial Metals Drop Year-End to Join Their Precious Metal Counterparts

by on January 2, 2014 4:59 am BST

Copper was hot and cold in 2013 on hopes that Chinese growth expansion would cause stockpiles to deteriorate. However, the London Metal Exchange showed an increase in inventories by 14 percent due to mine opening from South America to Asia. According to a Barclays PLC, copper supply is expected to outpace demand by 127K metric tons in 2014.

Other industrial metals, such as aluminum, zinc and lead capped of a poor 2013, and nickle posted a 19 percent decline last year. The trend in industrial metals is expected to continue as worldwide growth continues to falter with China forecasted to contract growth expansion closer to seven percent.

Copper is higher by .41 percent in the first trading day of 2014.

Gold and silver has capped of their 29 and 35 percent in 2013. The precious metals trade was different than most moves in the commodity space. Large declines in soft commodities and crude were based on strong fundamentals that supported the staggering drops, but the increase in physical demand for precious metals did little to alleviate the downward pressure. Only corn declined more than silver this year, and gold seen the largest price decline in 32 years while erasing the 12 year bull market.

Gold and silver are higher in early trading. Gold futures for February delivery has tacked on 1.56 percent with silver for immediate delivery adding 3.43 percent. Look for precious metals to pullback after hanging near 2013 lows.