Copper tiles
If this is the Groundhog Day that we have to relive ad infinitum, metals investors won't be complaining.
In what looks like a big bet on economic growth, equities and commodities markets are broadly rising, with metals hitting or heading towards record prices. (It actually makes the prospect of six more weeks of winter bearable.)
The headline number that is likely to become the theme of the day is copper heading towards $10,000 (U.S.) a tonne, after solid manufacturing data yesterday pointed to higher demand for the industrial metal. Three-month copper on the London Metal Exchange was trading at $9,966 a tonne. It earlier hit a record of $9,988.25.
Copper has gained more than 60 percent since last June when markets tumbled, fearing sovereign default in euro zone countries such as Greece. (The price on Globe Investor, by the way, is the Comex price, in U.S. cents per pound.) Data shows that since February 2009, copper prices have tripled, while open interest has risen by 25 percent and trade volumes by 50 percent, suggesting a rise in short-term trading and longer-term investment.
Traders said there was significant speculative demand for metals and other commodities, and that fund money could force prices to overshoot. Analysts say global copper supplies will remain tight and help propel prices to $12,000 a tonne and higher as output struggles to keep up with demand into 2012, and perhaps beyond, with not many new big mines coming through.
Copper led strong gains across the broader base metals complex, with tin hitting a record high, nickel touching its highest since May 2008, zinc at a 10-week high and aluminium near its highest since September 2008.
Also helping: The U.S. dollar, which hit 12-week lows, as the strong manufacturing data, low U.S. yields and stimulative U.S. monetary policy pushed investors towards riskier assets.
Investors also scooped up sugar , pushing prices to 30-year highs, as a cyclone threatened Australia's Queensland state, its main sugar-growing region.
Brent crude oil hovered near 28-month highs above the $100 per barrel level it broke through on Monday on worries that unrest in Egypt would trigger instability across the Middle East and North Africa. West Texas Intermediate crude gained 25 cents to $91.02.
The better prospects for global economic recovery dampened gold's safe-haven appeal. Gold was also dented by easing tensions in Egypt after President Hosni Mubarak said he would surrender power in September.
World stocks hit fresh 29-month highs, swept up in the same sentiment. MSCI's all-country world stock index, one of the broadest gauges of global equity health, was up 0.6 percent, at levels last seen in August 2008.
Its developed market counterpart gained 0.5 percent to come close to a high last seen in early September 2008. Emerging markets were up 0.8 percent on the day, but remain down more than 1 percent for the year, reflecting a recent shift by investors from emerging to developed markets.
U.S. stock futures were flat. Germany's DAX was up 0.1 percent at 7,189.17 while the CAC-40 in France was steady at 4,073. The FTSE 100 index of leading British shares outperformed its peers, rising 0.9 percent to 6,010.
Japan's benchmark Nikkei 225 stock average gained 1.8 percent to close at 10,457.36, while Hong Kong's Hang Seng advanced 1.8 percent to 23,908.96 amid a last-minute rush for bargains ahead of the exchange's close at midday. Markets in China, Korea and Taiwan were closed for the Lunar New Year holiday.
Sonali Verma