Is this the cult of the commodity? The nickel price jumped to a 13-year high this week as investors became more confident about the economic recovery.<\/p>\n
Commodity prices have rallied in the last six months but precious metals have hogged the limelight. Gold hit a seven-year high of $388.85 per troy oz a few weeks ago and platinum closed last week at a 23-year peak of $726.5 per troy oz.<\/p>\n
But base metals, poorer cousins to the precious kind, haven’t done badly either. Aluminium, copper, lead, tin and zinc all hit multi-year highs last week, but the pick of the bunch was nickel, which reached its highest level since September 1990. Starting the week at $10,410 per tonne, it finished at $10,894, up 4.6 per cent.<\/p>\n
So why are metal prices going up? Investors believe that a stronger global economy will lead to greater demand for these commodities, and with inventories low and supply limited, prices will be pushed up. Expectations for a bull market have also been amplified by hedge funds moving away from traditional financial assets. Equities look vulnerable if higher raw material costs dent company profits, and bonds look shaky after a change in interest rate expectations. Commodities look good.<\/p>\n
This positive outlook seems realistic, if mining companies don’t add to their production capacity. History tells us that more supply follows higher prices, eventually bringing prices down. The exception seems to be nickel, used to make stainless steel. There is no supply coming on until 2006 and plenty of demand from China, which is building up its own steel capacity. Nickel looks a good bet.<\/p>\n","protected":false},"excerpt":{"rendered":"
Is this the cult of the commodity? The nickel price jumped to a 13-year high this week as investors became more confident about the economic recovery. Commodity prices have rallied in the last six months but precious metals have hogged […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1362","post","type-post","status-publish","format-standard","hentry","category-hedgeco-news"],"_links":{"self":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/1362","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=1362"}],"version-history":[{"count":0,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/1362\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=1362"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=1362"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=1362"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}