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Moonshot Metals


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I received these 5 charts today which look at the performance of aluminium, copper, nickel, zinc and industrial metals ETFS over the last 15 years. The emphasis is on 4th quarter performance, but you have to notice something scary about these charts in recent years, they look like a moonshot, almost straight up. Metal Bulls will deny it is in the bubble stage yet, but some of these look gravity defying to me. Would you invest in these now and if so, why?











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Very good point.


But ... supply and demand, China, they were previous under-priced, lack of investment in ming, dwindling resources, recent correction may be close to an end, are a few reasons i can think of.


Agreed, the fundamentals look good, but these charts look like, well, party like it's 1999. I often think, too far, too soon and that's my impression of these charts. Maybe when it comes to the metals and commodities it is very different this time.

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at a minimum,

i would expect 50% or more of that big gain to get retraced

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More charts, but this time Soft Commodities to make a few comparisons. Again, two things interest me about these charts.


First, a few of them have had their own moonshots and look what happened shortly after. Coffee (in the mid-late 90's) and Soybeans (in the last few years) look remarkably similar to some of the metals charts above. I can imagine the coffee bulls in 1996 saying the fundamentals look sound, supply and demand, increasing markets in the east, a potential billion+ Chinese consumers, etc. So you bought at 25.00, and then spent the next decade watching it fall to below 3.00 if you are of the buy and hold type and believed the hype.


Second, despite the decline in these markets, it is probably only a matter of time before they turn and here's one possible investment strategy. You could buy coffee or corn now and then simply wait. You may have to wait some time, but when these markets take off, they can moonshoot in a short period of time and that's when you will need to keep an eye on it like a hawk and prepare your get-out strategy.













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One of the few metals that hasn't gone ballistic is Palladium which I've been looking at recently.




It's currently trading around $300 dollars an ounce. The spike in 2000 was Ford stockpiling for use in car exhaust catalysts. The price plummeted with the subsequent sell off. The recent slight upward trend seems to be a recent vogue for it's use in jewellery in China, as well as it's increased uptake in industry. The price seems to antagonistically mirror Platinum, to which it is chemically related. This means that when Platinum is soaring as it is now, Palladium price is low, but industry starts looking at replacing it's reliance on Platinum, with Palladium.


Coins are available:




but, unfortunately, like Platinum, VAT is payable in the UK. Still might be worth buying a few speculative ounces, though. It can also be traded on e-gold




though I've never use this site.



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