gsg_stock discussion

BCA Research- The Metals Price Correction Is Not Over

10:00:00, June 22, 2006

Base metals prices have more downside as global growth slows. Base metal prices have corrected significantly in recent weeks, with copper prices shedding about 20% in the past six weeks. However, technically they still look highly vulnerable. Metals prices are still about 30% above their 40-week moving averages—corrections typically drive prices to or below their moving averages, implying there is substantially downside risk in the near term. Moreover, bullish sentiment is still high compared with levels seen in past commodity price corrections, which from a contrarian standpoint signals more price weakness lies ahead. With the global economy beginning to decelerate, cyclical demand conditions are also bearish for commodity prices.

Bottom line: the correction in metals prices has further to go.

posted by gsg @ 6:34 PM