By Raul de Frutos
Lead fell sharply in December as the drop in crude oil drove every commodity down. Throughout this year, we recommended that investors not hedge lead. This is why it's always better to follow the current trend and wait until the metal is showing strength before taking long-term positions. What seems like a good buy can always become less expensive later.
Lead 3M LME 1 year out
Lead has fallen by 18% since July, driven by a rising dollar and by the plunge in crude oil. Lead's industry fundamentals haven't really changed since, but it is clear that when money is not flowing into commodities, any metal can take a hit.
What This Means For Metal Buyers
Lead is falling with commodities. There is no reason to take long-term positions in lead, the trend is down. In a falling market, what looks cheap can become an even bigger bargain.