The way they are going, it ($600) could come quite quickly, although we should expect to see some profit-taking.
Base and precious metals remain in a virtuous circle with each appearing to feed off the strength of the others.
It is difficult to know what is happening -- it may be profit-taking, but it is certainly not a trend reversal.
Correction? What correction? With the shorter-term players locking in profits and systematic CTA (Commodity Trade Adviser fund) selling met by trade and hedge fund buying, base metals have stabilized after a volatile 24 to 48 hours.
There does seem to be a desire to have exposure to commodities by both long-term funds and speculators.
If the fund buying is strong enough, it could lift prices to that target ($600) a lot quicker than we think.
Furthermore, with the market in deficit for the past three consecutive years, industry stocks are below critically low levels and the stocks-consumption ratio is forecast to remain below four weeks over the next three years and should continue to underpin strong copper prices.
Funds are still keen, with the end of the month likely to bring even more money to commodities due to the good performance they've had during January. It's a self-fulfilling prophecy at the moment.
Against this background, speculative buying underpinned a rise in prices.
We may not be out of the woods yet and further liquidation and selling could be lurking. Tonight's weekly chart closes will be important in determining near-term price direction.
