Rare earth metals |

Rare earth metals

I’m on the fence about rare earth metals – is this really just a global economy trade? I don’t think so. I think if you take some of the reports we’ve been discussing about lack of infrastructure, and limited build out of different commodity operations, there might be some underlying support regardless of immediate economic performance. As a disclaimer, I purchased PALL and PPLT, two newly formed ETF’s for palladium and platinum a couple of days ago. I do not recommend them, since I do not know your individual situation!

So it was interesting to read the following article (click here) about molybdenum prices. Here’s a quote:

Prices for molybdenum, a base metal used to make stainless steel, will likely rise 55% in the next two years, JP Morgan analysts said Thursday.

The question is why will these move? Will it be a currency play? Inflationary pressure? Economic growth? Better yet, what will make the prices come down? Is it speculative positions that drove prices up and they will soon go back to previous levels? I’m not sure, but for now I like the fundamentals on the ETF’s I mentioned. They will probably be volatile, but it’s part of the metals allocation, so there’s not a lot of exposure from a portfolio standpoint. Just something to consider.

Last 5 posts by Yaron Sadan

That sinking feeling - May 18th, 2012
Opportunity on the horizon - May 18th, 2012
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Losing Money Isn't a Crime - May 15th, 2012