October 2011 | Base Metals
Base metals’ relief rally on the back of the EU summit proved to be short lived
Base metals prices showed strong gains last week on the back of renewed investors’ optimism in the run-up to the announcement of the European rescue plan to deal with the fall-out from the Greek debt crisis. Although the rally proved to be robust, with copper prices crossing the $8,000/tonne mark, market sentiment quickly reversed as investors started questioning the size and sustainability of the rescue deal.
Base metal prices rallied last week, fuelled by improving investor sentiment on the back of widely anticipated EU debt deal. EU leaders agreed to increase the size of the European Financial Stability Facility (EFSF) to around €1 trillion and appear to have convinced Greek government bondholders to accept a 50% cut to the face value of their holdings. A third element to the deal was the recapitalisation of European banks to the tune for around...
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