Energy prices are up while base metals are lower following the much-anticipated speech from Federal Reserve Chairman Ben Bernanke. How and when the Fed will act remains in question, but the odds of action appear to have increased.
Copper traders are taking a wait-and-see approach ahead of Friday’s speech from the Federal Reserve chairman. The red metal did, however, get some lift from China’s continued commitment to buy European government bonds as a means to stabilize the Eurozone.
Australia’s central bank expects the mining industry to wind down from its high in about a year’s time, and companies such as BHP Billiton have already postponed major copper project investments. But with supplies expected to tighten further, rival Rio Tinto is prepared to continue forging ahead with developing one of the world’s biggest copper mines. Who’s right?
Hopes are growing stronger that stimulus measures from the United States and China will jump start growth. Still, the knowledge that Australia’s mining industry will falter in a year’s time is worrying commodities investors.