Gee even more from 3rd party sources re Frank's hair-brained $2.00 ok ok $2.50 prediction.Way back to May 23, 2012 and presto so far its come true for JP Morgan!. the others area ll clamoring to get in.
Gonna eat those words as all these other players bring on their own respective ETFs which means more competition to the LME's 600 offical warehouses throughout the world that compete with COMEX's Warehouses and now the Investment Banks getting into the act fighting for production. See who is highlighted in yello and why not UBS partnered with someone too?
The letter to the SEC states this type of investment vehicle in copper – widely used in construction, communication and transport – would “grossly and artificially inflate prices” and “wreak havoc on the US and global economy”.
Gold ETFs have been very supportive of the price and combined these funds now hold almost 2,500 tonnes of the precious metal, but given copper's essential role in the global economy investors hoarding physical supply would have a different dynamic altogether.
“Fundamentally copper is tight anyway,” says David Thurtell, metals strategist at Citigroup. “Add an ETF to that and it becomes explosive.”
The FT reports apart from JPMorgan, Credit Suisse/Glencore, Deutsche Bank, Citigroup and Goldman Sachs in partnership with BlackRock are all looking at copper ETFs. Goldman Sachs have already been tying up physical supply and last year signed an take agreement with Spanish miner Emed.
Copper stockpiles and global imbalances of supply have caught the attention of industry observers with some saying that there are rogue traders operating in the market and that prices are being distorted by dominant players.
The red metal fell to a fresh 4-month low of $3.42 a pound in New York trading on Wednesday following a a broad commodities sell-off over mounting worries about the global macro-economic outlook.
Today's price is a more than 20% drop from historic highs hit at the end of July last year of a shade under $4.49 a pound.
2011 saw dramatic price collapses for copper. From the record high in July the metal plunged to $3.07 at the beginning of October, a 31% drop in little over two months. In September 2011 alone, the price dropped 26%, losing over $1/pound during the month.
Read more about the changing market for copper:
He cried in a whisper at some image, at some vision—he cried out twice, a cry that was no more than a breath—"The horror! The horror!" — Joseph Conrad, Heart of Darkness