Commodities, Mining Stocks Sink As China Devalues Its Currency
$GLD, $SLV, $JJC, $OIL, $USO, $BHP, $RIO
Most commodities, from industrial metals to Oil, were crashing Wednesday after China decide to devalue its currency for the 2nd day running, renewing concerns about growth in the world’s largest consumer of raw materials.
Copper fell about 7%, going under $5,100/tonne on the LME for the 1st time since July 2009, to a session low of $5,062. It was last at $5,117, down $8 on the previous day’s close. In New York, it was slightly up (0.35%) to $2.340 lb on COMEX..
Brent Crude Oil prices steadied after falling almost 3% Tuesday, back below 50 bbl. The recovery was triggered by an upbeat report from the IEA balanced the Bearish impact of a further weakening of the Yuan and disappointing Chinese industrial output data.
Mining stocks fell again Wednesday, capping a grim month for the sector.
Once again Glencore (LON:GLEN) led the fall, as its shares dropped nearly 6%, driven down by concerns that the weak Copper prices and general raw commodities market conditions are straining the firm’s finances, ahead of 1-H results next week.
BHP Billiton (NYSE:BHP), was down 4.3% and Rio Tinto (NYSE:RIO) was trading almost 3% lower than Tuesday in New York
However, Gold is profiting from the situation, heading for its longest winning streak in 3 months.
Bullion prices were higher Wednesday morning, hitting another 3-week high in New York, on safe-haven demand and a less Bearish near-term chart posture.
The precious Yellow metal gained about 1.14%, or $11 to as high as $1,120.80 oz. Gold has recorded 4 positive sessions in a row.
Stay tuned…
HeffX-LTN
Paul Ebeling
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