HardAssetsInvestor

Written by Sumit Roy  |

October 20, 2011

Base Metals Report: Copper Traders Will Shift Focus Back To China Growth After EU Summit

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Outlook for base metals hinges on whether this weekend’s EU summit reaches a favorable outcome.

Unrelenting fears related to the European sovereign debt crisis kept base metals prices weak over the past few months. All of the metals stand near the lowest levels in almost a year; even the recent rebound in the stock market didn’t boost the complex noticeably.

This weekend brings a highly anticipated EU summit. The outcome will go a long way in determining whether the sovereign debt crisis in the region can be contained once and for all. Many are anticipating a comprehensive solution to come out of the meeting, with anything short of that likely to be interpreted as disappointing.

A favorable outcome may mean that base metals can finally bottom out and gradually begin to rebound as focus is shifted back on global growth fundamentals, which still remain strong. On the other hand, further deterioration in Europe will likely spur selling.