The price of copper has more than doubled in two years, the global economy seems to be slowing, and copper stockpiles are growing. Even the ramping price of the penny metal is starting to look doggy (as in "rolling over") on the charts. And Goldman Sachs, which went to a strong buy on commodities last October, is saying it's time to take profits.
So should investors hit the rip cord on copper?
Not according to Nicholas Snowdon, base metals analyst for Barclays Capital. Snowdon tells Nesto and me in the accompanying video that the fundamental story is alive and actually improving by some measures. Snowdon cited at least three factors that will work in copper's favor for the rest of 2011.
*Copper production is maxed out for the next few years.
*Global demand remains strong, suggesting higher prices, given the maxed-out supply.
*The Chinese, who consume 40% of the world's copper, have worked through a stockpile of scrap.Read More »from Snowdon: Copper Has a 30% Gain Left in 2011