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LME could crash tonight

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markrmau

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17 September 2004
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what a difference 24hrs makes.

The inflation figures in US were worse than expected and markets could think interest rates will go up.

this will cause hedge funds to pull out of metals because the carry trade looks more risky. i dont think it happened last night because of the offsetting china stuff.

i took a loss on my bhp today because it is more risk than my comfort levels allow.

i could be completely wrong.
 
Maybe not a crash, but in US$ (which doesn't seem to have moved much compared to DX basket)

Spot price from kitcometals: Cu: -1.27%;Ni: -.81%;Al: -1.47%;Zn: -.88%;Pb: +.62%

Futures from http://www.bloomberg.com/apps/news?pid=10001013&sid=aPVdN0jpUfxA&refer=commodity_futures

Copper for delivery in three months on the London Metal Exchange fell as much as $82, or 1.5 percent, to $3,225 a metric ton - the biggest decline since April 15. ....... Other metals dropped on the LME. Aluminum declined $19, or 1 percent, to $1,870 a ton. Zinc slipped $16, or 1.2 percent, to $1,310 and nickel fell $245, or 1.5 percent, to $15,800. Lead declined $16, or 1.7 percent, to $935 and tin was down $60, or 0.7 percent, at $8,125.

With the US market appearing very strong (at time of writing) I wonder what BHP will do? Also, these drops appear to be because of china worries, not US interest rates.
 
Hate to say this but a number of the metals are having trouble going through resistance, noticed a broadening formation in one, a retracement in another and a rounding top in yet another. It's not over yet but I'd be betting short or staying on the sidelines. I know inventories are falling but demand is important too and the graphs aren't showing as much as you'd think there is. Maybe the hedge funds have muddied the waters.
 
Again, we could be in for a drop on LME tonight. US CPI figures came in higher than expected, reigniting interest rate fears.

This is probably why BHP and RIO dropped today.
 
OK, I'll be the dummy. What's LME?

Thanks,

I'll just go suck on my bottle now.

Ghotib
 
Yes, London metals exchange.

http://www.lme.co.uk/

Where spot prices and futures for base metals are traded - these prices affect the valuation of your mining stocks - rio, bhp, zfx, ...

Other important markets are the new york mercantile exchange

www.nymex.com

-futures for light sweet crude, copper, gold, Al (yes some overlap with LME)

etc...

Have a search for the "links" thread for some links.

(ps, I could be wrong - doesn't look like falling at the moment)
 
Thanks GP. Thanks Mark.

I've just about decided to cut mining stocks out of my trading universe. But that doesn't mean the effects of price fluctuations don't matter to me.

Cheers,

Ghoti
 
ghotib said:
Thanks GP. Thanks Mark.

I've just about decided to cut mining stocks out of my trading universe. But that doesn't mean the effects of price fluctuations don't matter to me.

Cheers,

Ghoti
Click to expand...
$100k in tonight total, on various mainly gold and zinc. We will soon now tomorrow/today zinc still looking ok at this momment ,copper and nickel starting to look sad. Maybe a move into some Aus zincers tomorrow morning?
 
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