The metals maze

GUEST COLUMN

In December 2007, gold was at $800. Starting 2008, it completed its leg up to $1,000 and is now ruling at $930. While gold and silver might be hanging in there tight, metals as a group are scattered on the price performance scale.

For example, few would like to talk about zinc, which has crashed 50 per cent since January 2007. It was then when the metal had turned and Hindustan Zinc was expected to fall despite a positive BSE Sensex. The love has turned into hate.

And, all the merger talks between Zinifex and Umicore could not prevent Zinifex from crashing 61 per cent from merger highs. Euphoria about mergers, despite a 33 per cent success rate (since 1985) is unsustainable.

Even Uranium fell 50 per cent from its peak. There are, of course, many reasons why metals or markets fall or why things happen. But most reasons, like news always are late and cannot time a market. The reasons which worked for Zinc were linked to fractals of mass psychology and intermarket analysis.

To know about the relationships between metals