Base metals less vulnerable than precious metals?

Base metals could prove less vulnerable than precious metals, when it comes to price performance.

Precious metals, such as gold and silver, have become established safe haven assets for alternative investors during times of economy uncertainty. At present, though, the US economy is recovering strongly and the dollar is rising, while government bonds are also enjoying a rally. With the Federal Reserve expected to raise rates this month, or very soon in 2016, the outlook for gold and other precious metals is not glittering.

Palladium, silver and gold all weakened yesterday, notes Fast Markets, by 1.8, 0.4 and 0.2 per cent respectively, while gold was unchanged. Base metals also edged lower, with nickel down 1.5 per cent, copper down 0.1 per cent and lead remaining flat. Aluminium and tin, though, rose 0.1 per cent apiece and zinc climbed 0.2 per cent. Indeed, base metals rose by an average of 0.4 per cent this morning, while precious metals stayed mixed, suggesting that the former could be more resilient going forwards than the latter.