Looks like (at least to this observer) the correction in metal stocks is over. Evidence: LME inventories falling quickly, prices of gold, silver, other precious metals and nickel, zinc and copper up strongly this morning. Think the mini correction established a base for the resumed up trend in precious and base metal prices. Expect nickel to hit $25 US a pound within the next month, zinc with LME inventories looking to break the 100,000 ton mark should have no trouble recovering to the $1.80 a pound level over that same period. Copper is anyone's guess, the recovery has been remarkable and somewhat unexpected, imagine if US housing starts begin to recover which is not unfathomable. Look for metal stocks to start outperforming the underlying commodities as a lot of cash is finding it's way onto balance sheets and as takeover feverhas significantly reduced North American investing opportunities. Yes we can still find nickel prospects in other parts of the world but many have higher country risks. As for higher prices limiting demand, remember prices are going up in US dollars but not in the currencies of many other countries.
