You Are Cleared for Re-Entry into Copper
Now, just weeks after sounding the alarm, Goldman Sachs is back to sound the all-clear for commodities; particularly copper, zinc, and oil. With that call, Goldman reiterated the very same 12-month price target for copper ($11,000 per ton) that the bank initially forecast back in December, and called the malleable metal "an attractive opportunity." One might reasonably interpret the past six months, then, as something of a head-fake that inserted a pause into the long-term upward trend.
You Have Been Cleared for Re-Entry into Copper
After closing my silverminer CAPS pick for the Global X Copper Miners ETF on April 8 (days before Goldman Sachs issued its short-term bearish call), and locking in a 13.85% nominal gain after four months, I am now re-opening the play by adding the First Trust ISE Global Copper Index Fund to my CAPS portfolio. (Ticker symbol CU). Upon closer inspection, I consider CU a better vehicle than the COPX, though on any further near-term weakness I will look to add the COPX and additional copper picks as well.
Please note, Goldman did express the possibility for additional near-term softness in Chinese demand. As in most cases, I recommend a gradual approach to entry.