Metal prices remain firm
Chart of the Week 03 Jul, 2009
Debate continues on the timing and pace of a global economic recovery, which has contributed to volatility on global stock markets during the past month. This follows a three month period from early March, when markets rose strongly driven by increasing optimism that the worst of the global financial crisis is now behind us.
A similar pattern is evident in the base metal markets, as illustrated below in a chart of the LMEX (which represents a composite of the major metals traded on the London Metal Exchange):
Source: LME
Interestingly, the metal markets appear to have pre-empted a recovery somewhat earlier than the stock markets (by around a month). Additionally, while stock markets generally have experienced a pull back in recent weeks this is less discernable amongst the metals.
The trend in base metal prices (above) also continues to mirror the trend in US$ / A$ exchange rates (below):
Source: RBA
It would appear that the Australian dollar remains captive to the perception / reality that it is a commodity currency.
