Dollar weakness in the past three days has indeed been a key driver of the copper price rise. |
Exits from the baskets could have a disproportionately larger impact on the less-liquid metal markets. |
Mine supply in zinc remains very constrained. Zinc is the one metal that deserves a re-rating based on physical demand and supply characteristics alone. |
Oil has been a key driver because it's a big part of the commodity baskets like Goldman Sachs index. Oil is making these baskets perform, which is making people buy the baskets. |
People are positive on the demand side of these metals as the global economy grows. Falling inventories also help. |
The economic background to metals is therefore supportive, but metals also have the additional price driver of extensive activity by investment funds. Ongoing investment into commodities by broad-based global funds remains very strong. |
The real demand source is China, rather than Europe, but the country is rapidly alleviating its raw materials input problems. |