John Gross, publisher, The Copper Journal, as been busy again making sense of the wild-and-whacky metals markets. Here's what he sees this week:
Diverging . . .
Base metals were mixed on the week; the dollar rose sharply, ostensibly helping to push precious metals lower, while energy markets are climbing.
There is little point in trying to logically explain why markets do what they do, but our curiosity nevertheless gets the better of us, so we seek to find answers, with our efforts most often rewarded in vain. For example, over the past week or so, we all read or heard that crude oil is rising because of recent OPEC meetings, wherein it was agreed (somewhat, almost, maybe) that production would be cut. Well, on the surface that would seem to make sense, until we look at the charts.
Note that crude bottomed back in January at $29, and has been rising since then. How do we reconcile recent reports and the market moves? We can’t. Also, take a look at the natural gas chart. It too hit a low earlier this year, and recently broke through the $3.00 level of resistance, on its way to testing $3.25 from January 2015.
So, although a review of the fundamentals for some markets would suggest lower prices, the technical approach is telling us something very different. Winston Churchill said “I only believe in statistics that I doctored myself.” Let that be our guide.
If you would like to learn more about how to manage your wire and cable inventory in this volatile market environment, email John at by clicking here or calling him at 631-824-6486.
