News

February 08, 2010

The Trend Is Your Friend Until The Bend At The End: Man Group’s Woes Offer A Cautionary Tale To Commodities Investors

By Rob Davies

The rout in commodity prices continues, driven by a strong dollar and a general move away from assets deemed too risky. A relatively modest rise of one per cent in the dollar last week was outweighed by a 6.5 per cent fall in the price of copper to US$6,570 a tonne.

So, even though the Aussie dollar fell by 2.5 per cent, producers in that country still saw a real fall in their domestic price. Other metals experienced similar declines. Aluminium dropped 3.5 per cent to US$2,051 a tonne, lead by 4.3 pre cent to US$2,000 a tonne, zinc by 3.4 per cent to US$2,082. Only nickel that managed a gain, and even that was modest, a mere 0.7 per cent increase to US$18,250 a tonne.

These falls gave back a lot of the ground that commodities have gained in recent...