Goldman Sachs Ends Bet On Higher Copper Prices Based On Recovery Outlook

Posted By on February 24, 2010

This should pretty much tell the story on copper and the recovery, Goldman has the inside track on many things.
 
 
Goldman Sachs Closes Copper Bet on Recovery Outlook

By Stuart Wallace

Feb. 24 (Bloomberg) — Goldman Sachs Group Inc. ended its recommendation to bet on higher copper prices because of concern that economic recovery in developed markets is not yet on solid footing.

Copper more than doubled on the LME last year as investors anticipated that economies recovering from the steepest slump since World War II would use more commodities. Stockpiles in warehouses monitored by the bourse have more than doubled since July and prices dropped 3.5 percent this year on speculation that mines will expand supply faster than gains in demand.

Despite recent positive signs in Developed Market, we do not believe that DM is yet on solid footing,? the analysts wrote in the report. We, therefore, still view DM demand as a key risk to our view.

Demand from China, the world’s biggest copper consumer, for global supplies may weaken because prices on the Shanghai Futures Exchange are now close to those in London, discouraging arbitrage trading, the bank said.

More at….   www.bloomberg.com

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