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For Base-Metal Investors this ETF Could Be the Right PICK Now

Stock MarketsMay 14, 2021 03:30PM ET
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© Reuters. For Base-Metal Investors this ETF Could Be the Right PICK Now

Rising inflationary pressures on the back of central bank liquidity and government stimulus, a falling U.S. dollar, increasing demand for worldwide infrastructure building, green technology, and other industrial applications create an almost perfect bullish storm for the ferrous and nonferrous metal. Hence, the iShares MSCI Global Metals & Mining Producers ETF (PICK) has risen to the highest price level since 2012. Because the trend remains bullish, we think investors would be remiss not to take a close look and consider taking a position in this fund. Read on.

  • Base metals prices surge
  • The producers are making huge profits—PICK holds the leaders
  • More than a triple over the past year
  • Copper is the leader of the pack—Goldman Sachs (NYSE:GS) sees the price 50% higher by 2025
  • Bull markets rarely move in a straight line—Buy on weakness
In March 2020, copper fell to a low of $2.0595 per pound, the lowest price since June 2016. The red metal fell as the global pandemic spread worldwide, causing businesses to grind to a halt and all asset prices to plunge.

From April 2020 through May 2021, copper has made a remarkable recovery, as the price of nearby COMEX futures rose in 12 of the past 14 months. Furthermore, the red metal that is a building block of infrastructure, a critical component in green technology and many semiconductors and a bellwether commodity for the global economy hit an all-time high on Friday, May 7. The price surpassed the 2011 all-time peak on COME futures at $4.6495 per pound.

Copper is the leader of the base metals that trade on the world’s leading nonferrous metals forward market, the London Metals Exchange. Aluminum, nickel, lead, zinc, and tin prices have also rocketed higher, following copper’s lead.

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For Base-Metal Investors this ETF Could Be the Right PICK Now
 

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