Turmoil continues to paint an uneasy picture for commodities in August as yesterday, the selloff in emerging-market assets and commodities worsened, creating further currency declines and sending developing-nation stocks to their lowest position in nearly four years.
Lead is a commodity that joined nickel and zinc in retreating, with copper dropping to its lowest point since 2009 and aluminum hitting a six-year low.
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China continues to be a huge factor in the direction lead is trending. We identified the nation’s manufacturing sentiment and its prices for the metal as two of the main drivers this month.
It’s been one week since China devalued the yuan to its lowest point in more than 20 years, worrying global investors as the world’s second-largest economy continues to struggle.
“Since China devalued the currency last week, investors have become more concerned about the growth outlook for emerging markets,” Michael Wang, London-based strategist at Amiya Capital LLP, told Bloomberg Business. “We need to get the first Fed rate hike out of the way. We also need more evidence that the near-term outlook for China’s economy is stabilizing.”
Lead Proves Resilient, So Far
We reported that after hitting a 5-year low in March, lead rebounded with an 18% rise in April, shocking many and also proving just how resilient the metal has been. We also warned that such a sharp increase is commonplace after a sharp decline, as evidenced by copper prices following a similar pattern.
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