LME: Copper, gold prices hit record as traders position for commodity mega-rally

Already a subscriber?Panicked traders are ramping up bets on industrial and precious metals as an intensifying supply squeeze grips global markets, wrong-footing bearish investors who are being forced to cover short positions.

“When you have momentum like this, everyone is worried about being caught on the wrong side, so traders are covering their positions which only adds to the upwards price momentum,” said Commonwealth Bank’s commodity analyst, Vivek Dhar.“Everyone starts piling in to either protect themselves or to make a profit, so there’s a fear of missing out and a fear of being hit by being on the wrong end of this rally.

The metal market’s sensitivity to supply issues was exacerbated by unrest in New Caledonia on Friday, which triggered concerns about further disruption to nickel supplies, causing prices to spike aggressively. The policies included removing the mortgage rate floor and cutting the minimum down-payment ratio for individual home buyers.The package lifted iron ore futures in Singapore 1.3 per cent on Monday to $US118,90 a tonne, and buoyed ASX-listed mining stocks. Index heavyweights BHP and Rio Tinto were both up around 2 per cent on Monday to $45.74 and $135.35 respectively.

“Multi-year low stocks along with negative market balance warrant higher silver prices,” said ANZ senior commodity strategist, Daniel Hynes.

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