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CANADIAN PERSPECTIVE: Lowly lead leads metals price recovery

Earlier this year, I asked readers to predict which of several metal prices would gain the most during the first qu...


Earlier this year, I asked readers to predict which of several metal prices would gain the most during the first quarter of 2009. To my surprise, the biggest gain was made by lead, up 35.2%, to US$0.58/lb. Perhaps that is because it had sunk so low from its high of US$1.75/lb two years ago.

 

That lead should lead the charge surprised almost all of the 149 people who responded to our poll. Only three correctly guessed the lead price would have the greatest gain in Q1. Congratulations to them.

 

The next best price rise was that of copper. That price jumped 29.6% to US$1.81/lb. The price is again in the range of what it was during 2004-05, still far below the $4.00 highs that it touched in 2006 and 2008. The 30 readers who thought copper would be the winner at least have each other for company.

 

The third place finisher was zinc, which bounced up 19.4% in three months to US$0.56/lb. There is still much room for improvement compared to the price of over $2.00/lb for a brief period two years ago. The zinc price also surprised many of our readers. Only 12 of them picked it to increase the most.

 

Gold was the other metal on our list to show a price gain during the first three months of 2009, but only 4.9%, to US$919/oz. In March last year it briefly rose over $1,000/oz, and investors were hoping it would continue to rise. We evidently have many gold bugs among our readers because 67 of those responding to our poll thought that the gold price would be the biggest gainer. Instead we have price volatility. Fallout from last fall’s global economic crisis has forced the price to retreat, dipping below US$720 briefly in November and December 2008. The experts, analysts and pundits put the medium term price back at US$1,000/oz, reaching US $2,000 or even US$2,500/oz. At least they agree on an upward trend.

 

Bad news for the 15 readers who chose nickel and 23 who chose uranium. The price of both those metals continued to slide. At about US$4.00/lb, nickel was off 4.6%, and the uranium spot price at US$42.50/lb was off 19.8%. Better luck next time.

 

The economic upheaval of the last six months has introduced overwhelming variables to the metal price prediction exercise. Even at the best of times, it is the unexpected that can cause the most price movement.

 

If CMJ readers have any tips or hints on how to successfully predict metals prices over the next year, we would love to hear them. Email them to me at MScales@CanadianMiningJournal.com.

(Do the British or Las Vegas bookies give odds on metal prices?)


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