South African bank forecasts higher base metals prices

Prices for base metals were mixed on Tuesday after Standard Bank of South Africa said that base metals prices are likely to increase next year. The bank said that it expects the average cash price for copper to go up by 2.9 percent, while it forecast that aluminium prices will grow by an average 3.4 percent, zinc prices by 9.9 percent and nickel prices by 12.5 percent.

In the day’s session, nickel and zinc prices were up but the prices for copper and aluminium both declined. Nickel added 0.5 percent to $29,600 per tonne after inventories in London Metal Exchange storehouses dropped to only 1,794 tonnes. Three-month zinc was 2.5 percent higher to $3,680 per tonne, while three-month copper dropped 0.6 percent to $7,405 per tonne and aluminium fell 1.3 percent to $2,584.5 per tonne.

Meanwhile, gold dropped 0.6 percent to $572.80 per troy ounce even though tensions were still high over North Korea’s claimed nuclear test on Monday. Despite the day’s decline, Baker Steel Capital Managers said it thinks gold could breach its $850 per troy ounce record high price due to higher demand for jewelry in China and India as well as because of structural weakness in the US dollar.