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Ho, Ho, Ho – Will Santa Be Kind To Investors As They Look Ahead to 2015?

By Jim Williams

Traditionally, investors look at the weeks of Christmas and New Year’s one of two ways – either they run around frantically trying to end the year with a bang. Or, they figure the year is probably done and dusted by now, so bring on the holiday lunches, let’s go shopping and get ready to ramp it up in 2015.

While the calendar may be running out on this year, the up-and-down flow of the price of copper keeps on churning. Copper futures in London dropped the first two days of the week based on concerns of global oversupply, slowing industrial growth in China and home purchases here in the U.S.

ANZ Bank released a research note saying most commodities appear oversold, but weak near-term fundamentals are unlikely to boost investor confidence heading into 2015.

Supply-side issues will dominate early next year while the demand backdrop remains muted, according to the note released Monday.

“We think it will be a year of two halves. The first half will be weaker and more volatile, but the second half should improve as increased supply-discipline and stabilizing growth begin to emerge,” ANZ said.
Another factor in the drop in copper prices was the fact that purchases of previously owned U.S. home dropped more than forecast in November.

Sales fell 6.1 percent to a 4.93 million annual rate in November. That is the weakest month since May according to the National Association of Realtors. Economists expected a 5.2 million rate. Builders are the top copper users in the U.S., the world’s second-biggest consumer behind China.

The housing report “is very disappointing for copper and other base metals,” Bart Melek, the head of commodity strategy at TD Securities in Toronto said.

Copper futures for March delivery have been hovering just under $2.90 a pound. The price has declined 15 percent this year amid concern that global mined supplies will top demand as the economy cools in China.

On the London Metal Exchange, copper for delivery in three months fell 0.7 percent to $6,355 a metric ton ($2.88 a pound). 

In Other News

Following up on a story we brought you a couple of weeks ago, the copper for land switch attached to the 1,600-page National Defense Authorization Act for Fiscal Year 2015 – known as Resolution Mine – was signed by President Obama last week. Buried deep in the pages was language facilitating a land swap in which Resolution Mining Company, a joint project of two of the world’s biggest mining firms – Rio Tinto and BHP Billiton, will get 2,400 acres of federally owned land surrounding the mine in the Oak Flat area of the Tonto National Forest in exchange for 5,300 acres of its pristine private land. The deal paves the way for full build-out of the mine, near Superior, 60 miles east of Phoenix. It sits among 80 other active mines in the Arizona Copper Triangle, but once operational, will be the largest in the country – by far.

Geologists estimate Resolution Mine could supply the country with 25 percent of its copper needs for the next 40 years, for everything from home and building construction, car manufacturing, power connectivity and wind turbines to medical supplies, appliances and money. 

The above information on Resolution Mine was compiled from a FOX News online article. Click here to read the entire story.

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