Quotes from Commerzbank Corporates & Markets:
-Most metal prices are making moderate gains as the new week of trading begins, bolstered no doubt by firm Asian equity markets. The Nikkei Index for example closed above the 18,000 point mark for the first time in 7½ years. Japan's weaker than anticipated first-quarter GDP growth appears to be being ignored, on the other hand.
-The trading volume on the metals markets is likely to be well below average in the coming days, meaning that even small buy and sell orders will be able to spark major fluctuations. This is because US markets remain closed today for a public holiday.
-Meanwhile, the New Year Festival will be celebrated in China from Wednesday, so not only will the markets there remain closed from 18-24 February, but production in the country will also come largely to a standstill. Money managers still remain sceptical about copper and are thus no doubt preventing the price from making any sort of noticeable recovery.
-CFTC figures show that net short positions were expanded by 37% to 14,100 contracts in the week to 10 February, putting them at their highest level since early October. Thus positioning has been net short for 21 straight weeks now. We regard this pessimism among market participants to be exaggerated and expect prices to recover significantly just as soon as sentiment among speculative financial investors shifts.
