MEIR ON METALS: Markets come up for air after Wednesday’s bloodbath
Dec 15, 2011 | 10:46 AM
Analyst Ed Meir looks at what is moving the metals markets on Thursday.
Copper and general commentary: There were no signs of Christmas cheer in the markets on Wednesday – or any other kind of cheer for that matter – after a brutal sell-off set in, the likes of which we have not seen in some time. Apart from strong gains in the dollar and the US bond market, practically everything was down, with base metals, precious metals, energy and gas all getting hammered.
US equities also stumbled and have now given up about half the gains generated since they rallied late last month on news that global central banks were expanding their swap lines.
Oil prices were off by some 4%, their largest one-day drop in three months, while copper led the declines in base metals, falling a whopping 5% to $7,176 per tonne, their weakest showing in three weeks. Although it recovered a bit towards the close, key support at $7,285 was nevertheless taken out.
There were roughly 5% declines in lead, tin and nickel, but the most eye-popping sell-off occurred in precious metals, with gold dropping a rare 4% on the day, as a combination of technical selling and a violation of the 200-day moving average triggered the complex’s second-worst rout....
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