Pikes and Peaks: Gold, Copper, Oil

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While metals such as gold and copper have recently hit record highs, the future outlook is uncertain – particularly since oil and the global economy are adding to the volatility of the metals market.

Always considered the safe haven of metals, gold reached a record $992.95 an ounce earlier this week. Soon, it could even hit $1,000 an ounce. Who is to say, however, if it’s a decent time to jump into a deepening pool of gold wealth? This is a terrific time to sell old gold jewelry and make some bang for your bling, as Lisa reported in a past entry, but the investment arena isn’t as certain. With prices that jumped 52 percent since the end of 2006, the oft-promising metal could be a high risk at this point. Then again, the dollar could be pushing gold even higher in value next week, when the U.S. jobs report, which is expected to be weak, is released against the backdrop of the U.S. dollar dropping further in value against the Euro.

In addition to the weak dollar, fresh highs for oil look set to entice further anti-recessionary/inflationary hedging towards gold and will ultimately push the metals higher, Bullion Desk analyst James Moore explained in a recent Forbes article.

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Purchasing.com noted the price of oil looks to remain high, already a frightening thought when the price is above $102/barrel. Maybe more of us in the metals industry should support the research of energy alternatives. After all, if you’ve ever read The Party’s Over: Oil, War and the Fate of Industrial Societies, a book from Richard Heinberg (which contains several nuggets of wisdom, despite all the conspiracy theories), you’ve realized a natural gas crisis could be looming. And you’ve probably had nightmares, too. It’s that kind of book.

As the price of oil continues to alter the prices of metals, base metals have lowered slightly in value, although there are hints that it’s a momentary decline from the peak and value could — once again — rise at any moment. Copper, which recently hit a record $4 per pound, also sees helpful development from low inventories. Stocks are currently at their lowest level since last October. Investment demand seems to lead to pleas for the red metal, as does infrastructure development. LME reports the official opening stock for copper, and on March 5, our most recent records show it was reported at 138,150 tons.

Likewise, aluminum hit its highest value in nearly two years earlier this week, reaching $3,230. Tin, nickel, zinc, and lead, we see, have all fallen. It will be interesting to see how the price of metals and oil continue to alter over time, peak or no peak.

–Amy Edwards

Comments (2)

  1. upendra says:

    what is future of gold & silver?

  2. admin says:

    Great question. We’ll write a post on that within the next two weeks. Please check back with us. LAR

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