Lead Price: Bearish Signals Mean No Need To Make Commitments

Includes: LD, LEDD
by: MetalMiner

by Raul de Frutos

Lead remains near its lowest levels of the last year. This doesn't come as a surprise after the bearish signals that lead gave in March and the industrial metals sector, in general, remaining weak.

3M LME Lead Price since 2013.

3M LME Lead Price since 2013.

As we commented in February:

"Lead prices might keep gaining support during the coming months. However, the uptrend is far from strong, and we still don't see lead trading above $2,500 per metric ton on the LME. It might make sense to wait until prices show real strength before making long-term commitments."

Indeed, the technical picture looks more bearish than it looked at the beginning of the year. We recommend that lead buyers not take long-term positions unless prices break above $2,250/ton. Attempting to purchase on the dips when there is no foreseen risk is not a good buying strategy.

By reading the market and understanding when a metal is likely to have upside momentum, buyers can set price targets, manage their risk exposure and reduce costs without depending on subjective opinions that try to guess which direction prices will take.

What This Means For Metal Buyers

Lead seems incapable of reaching new highs. Buyers might not need to take long-term positions through the rest of the year. We would recommend that buyers not worry about price fluctuations unless prices break above $2,250/t.