EASY MONEY MAKES METALS SHINE

Not only equities and gold, but industrial commodities have also bee nona tear this year, despite the economic shock caused by the covid -19 pandemic. th el me metal index, ag au ge for performance of posted its fifth straight monthly advance in august—its longest winning streak since 2009. the index is currently up more than 30 percent from its 2020 low sin march at the height of the Covid-19-triggered-sell-off. copper, zinc, lead, nickel, tin, and aluminium— all have gained between 16 percent and 47 percent since the end of march. the sharp rally has boosted the prospects of commodity stocks. analysts say easy liquidity and china demand are driving metal prices up .“one of the major reasons for the metal boom is access to cheap money. there is a continued risk-off sentiment on the macro economic front. Despite this, the market has an overall positive view on metals like copper and zinc as chinese demand has been recovering well ,” say sn av ne et dam a ni, vice-president( commodities research) at Motil al osw al financial services.

The weakness in the dollar has also supported prices .“the accommodative stance adopted by the US Fed indicates a low interest environment for a prolonged period which has kept the green back under pressure, making industrial metals cheaper for other currency holders ,” says ya sh Saw ant, research associate, angel bro king. Another possible reason for the price rise is hedge funds. experts say many funds have increased their wager in this space and mosthavelong-positioning.