To know where the lead price forecast is going, we must understand that like all the industrial metals, lead peaked in 2011.
This is not a coincidence, since industrial metals tend to move together. In my opinion, the sector causes an equal or even greater impact on the metal price than the metal itself.
However, the picture looks more positive for lead than for other metals. Lead is trading at levels 25 percent below its peak in 2011, whereas metals like aluminum and nickel are trading at levels 38 and 50 percent lower than their 2011 peaks, respectively.
The reason is that lead is trending higher since July 2012.
In the medium term, lead prices have been trading in an ascending channel for the past eight months. These patterns are formed as traders identify those levels as buying and selling points.
Near the upper level, traders would start taking short positions (betting on falling prices) as they think the metal is overbought and people who took long positions would exit the market as they see prices struggling, pushing the price down. The same can be said for the lower level.
In the short term, lead is likely to keep trending higher within these levels.
When a trader or group of traders pushes prices out of these levels, the market usually takes that as a bullish or bearish signal, pushing prices to trade on new levels.