Copper, Lead and Zinc Lead the Way for Base Metals. Gold Nowhere!

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...gold, which would almost certainly be tracked by silver, is likely to see a steady increase as long as the dollar continues to decline. Base metals may be more volatile, subject to short term disruptions in supply, but long term perhaps the prospects for precious metals prices are the stronger.

While perhaps most metals sector investors are still more focused on the prospects for a dramatic rise in the gold price, it has been some of the base metals which have been the real performers of late. Unlike gold, base metals consumption is dependent on supply and demand factors, which again are driven by the strength, or otherwise, of the world's economies. Even though some key economies may be slowing down, they are still mostly recording positive growth - and any slowdown is currently being more than offset by the double figure increases in rapidly expanding economies - particularly China where the current growth rate this year is put at over 11 percent.

The mining sector, though, has been unable to keep up with burgeoning demand for base metals. To bring totally new production on stream is very much a long term process. ...

Overall though, the major base metal mining companies are battling just to replace a fall-off in supply from aging operations - so supplies will remain tight and prices strong....

So, although base metals have hugely outperformed precious metals of late, will this continue? The writer considers that gold - which would almost certainly be tracked by silver - is likely to see a steady increase as long as the dollar continues to decline. Base metals may be more volatile, subject to short term disruptions in supply, but long term perhaps the prospects for precious metals prices are the stronger.

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