Trade tensions weighed on industrial metals, while geopolitical uncertainty and a softer dollar enabled precious metals to climb. Indeed, it was a very mixed picture for our markets during December, and for 2019 overall.

As the Price & Inventory report illustrates, precious metals did quite well with double digit percentage gains posted all around. In the nonferrous department though, copper was the only one that rose during the month, and on a year to date basis.

Spot copper averaged $2.7703 during December, up 11.6¢, or 4.4% from November, and was up 4.7¢, or 1.7% from last December.

For the full year, copper averaged $2.7227, down 20.3¢, or 7% from $2.9257 during 2018.

Reflecting the divergent markets, while copper, aluminum, and tin traded above their respective five month moving averages, lead, nickel and zinc are below the five month mark.

And from a more macro point of view, there remains a deep disconnect, relatively speaking, between low prices and low inventories of metal held in warehouses.

One does not need to spend a great deal of time doing an in-depth analysis of the markets to see the incongruity, just glance at where inventories were for each metal a few years ago, and where they stand now and you will see our concern.

As for the other markets, crude oil put in a strong showing during the month as it rose $2.73, or 4.8% to average almost $60 per barrel, and has climbed almost $11, or 22% from $49 per barrel last December.

Equity markets, here and in many countries around the world were the star performers, with the S&P 500 monthly average hitting a record high 3,177, representing a 610 point, or 23.8% gain from last December.

And as we review the charts, it’s hard to believe that ten years have passed when markets – base metals, precious metals, energy, and equities were soaring, as major central banks poured trillions of dollars into the financial system to save it from collapse.

It makes one wonder where we go from here -

Regards,
John E Gross

• View Monthly Report Charts (PDF)
• Copper Journal Chart 1999-2019 (PDF)