TSCI Street Pulse - January 19, 2010
Commodity Comparison
The following chart illustrates the changes that have occurred in the prices of key metal commodities: gold; silver; copper; lead; zinc; aluminium; nickel; and uranium.
The chart shows the relative price changes for each of these commodities beginning in May 2007 and plotted quarterly thereafter.
Gold and silver are the clear winners over this time frame.
But, let us see what has happened since the March 9, 2009 market lows. The chart on the following page shows a different story.
From the March 2009 lows, the leading commodities for price increases are lead, zinc, and copper, which are the economic base-building recovery commodities. Nickel and aluminium are not far behind. Gold, silver, and uranium bring up the rear.
For 2010, our position is that the price of gold and silver will, at best, end the year where each started, being around US$1,100/oz. for gold and US$17.50 for silver.
We expect the base metals: copper, lead, zinc, and nickel in particular to appreciate modestly over 2010.
Our bet for 2010 is uranium. It has gone nowhere over the past nine months, and it fell substantially since it reached its bloated highs in mid 2007. With the continued emphasis in many emerging countries on developing nuclear plants as a source of energy, we believe that uranium will stage a marked recovery this year.
Research Available: eResearch
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Bob Weir, B. Comm, B.Sc., CFA. - eResearch
Mr. Weir has 43 years of investment research and analytical
experience in both the equity and fixed-income sectors, and in the
commercial real estate industry. He was at Dominion Bond Rating Service
(DBRS) from 1994 to 2001, latterly as Executive Vice-President
responsible for supervising the firm’s 34 analysts and conducting the
day-to-day management affairs of the company. He joined eResearch in 2004 and has been its President, CEO, and Managing Director, Research Services since May 2005.
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