Over the past 35 years, movements in metal prices have shown a strong tendency to converge and little tendency for prolonged periods in which one metal price has displayed unusual strength or weakness. A summary of analysis based on price movements in the six main daily traded base metals - aluminium, copper, lead, nickel, tin and zinc - was referred to in a recent issue of the PortfolioDirect weekly newsletter. (VIEW LINK) The average 1-6 ranking in monthly price movements for the six metals ranged between 3.4 and 3.6 over the period. Over the 420 months and six metals, the longest stretch in which one metal had run ahead of the rest was four months. That happened on just four occasions. There are macro forces working in the same direction. Strong prices also attract investment. Weak prices cause production cuts. The largest deviation from the norm over the past two years has come from zinc prices, the commodity most frequently referred to as showing unusual future strength. The most significant laggard has been tin.
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