Bloomberg.com: U.S.: "May 16 (Bloomberg) -- Metals such as copper and zinc may resume their rally to record highs as hedge funds and other investors return to buying commodities after price declines.
Copper plunged as much as 9 percent in London yesterday before paring its losses and ending the day down 3.2 percent. Zinc, at one point down 12 percent yesterday, the most in 16 years, finished down 6.7 percent. The partial recovery from bigger losses gave bullish traders and investors more confidence that prices may rise again to new peaks.
``It's a lot of small players selling and the big funds are still in,'' said Jan Johansson, chief executive officer of Stockholm-based Boliden AB, a copper and zinc producer, in an interview yesterday. ``People following the market aren't worried at all.''
Some investors who poured money into commodities grew concerned the rally was over and that rising global interest rates may slow economic growth. Copper almost tripled in the past year and aluminum jumped 82 percent as China increased its use of raw materials and investment funds bought commodities seeking better returns than stocks and bonds.
Robert Shiller, an economist at Yale University in New Haven, Connecticut, and author of ``Irrational Exuberance,'' said last week commodities markets resemble the technology-stock bubble of the 1990s.
``A bull market is not a bubble,'' said Michael Purdy, vice president of metals trading at ABN Amro Bank in New York. ``We've had every reason in the world for these markets to rally. The fundamentals have been rock solid -- good, solid demand and supply problems. It's not a bubble by any stretch of the imagination.'' May 16 (Bloomberg) -- Metals such as copper and zinc may resume their rally to record highs as hedge f"
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