New Heights for Base Metals
All that glitters may be gold, but commodity CFDs offer more to traders than merely the most precious and popular spot metals.
In times of economic uncertainty, investors tend to favour gold as a relative safe-haven, or use the precious metal to hedge against inflation and fluctuations in international currencies. But the foundations of a real recovery are built, quite literally, on industry, and industry depends on base metals such as copper and aluminium, among others.
The price of a metal like copper is often directly related to the strength – or at least the perceived future strength – of the economic recovery in high demand regions. When China, for example, reported that economic growth for the first quarter was the best on record in almost three years [1], the three-month copper future on the London Metals Exchange rose by 0.6%. And it’s not just copper – nickel also reacted to the news out of China, rising to its highest level in two years.
New highs for copper
On 12 April copper climbed to $8,043.75 per tonne, its highest intra-day price in 20 months. In fact, the metal has been trending steadily upwards since mid-March, as major industrial countries release positive growth forecasts for the coming year. Monday’s high proved temporary, however, as analysts blamed the rally on investment speculation rather than actual demand, resulting in an immediate correction. Ultimately, though, the underlying reality will steer the course, and only time will tell which direction that will take.
Metals forward contracts
IG Markets offers forward contracts on a range of metals, from precious metals like gold and silver to industrial metals like copper and aluminium. Set to expire at a specific date in the future, we offer forward contracts on the following metals:
- Gold
- Silver
- High Grade Copper
- Palladium
- Platinum
- Aluminium
- Copper
- Lead
- Nickel
- Tin
- Zinc
For more information on forwards contracts, including dealing hours, margin requirements and last dealing days, see the Metals (Forwards) tab on our Metals: Contract Details page.
If you are interested in trading metals CFDs, you can find out how to apply for an account to get started.
Source: [1] Bloomberg News (15 April 2010)
Updated: 19/04/10
