Tags: Copper | Gold | Jump | Inflation | Fear | wsj

WSJ: Copper, Gold May Jump 30 Percent on Inflation Fear

Friday, 04 Feb 2011 09:54 AM

Copper and gold could rise 30 percent in 2011, the Wall Street Journal reports.

Inflation will be an issue for many countries, and rising consumer prices tend to send investors racing toward gold.

Copper prices, meanwhile, will rise as demand outstrips supply.

"We are positive on growing metal prices," says Sahit Muja, president and CEO of Albanian Minerals, a mining and trading company.

In the United States, robust fiscal spending on top of expansionary monetary policy has some worried that inflation — already an issue in emerging markets — may come to the United States.

Higher commodities prices can also often up consumer prices, although Federal Reserve Chairman Ben Bernanke has said that hasn't been the case up to now.

Unemployment rates, in the meantime, take top priority.

"Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established," says Bernanke, according to The Washington Post.

"Overall, inflation remains quite low."

Globally, however, inflation is an issue, especially for Europeans.

"We continue to see evidence of short-term upward pressures on overall inflation, mainly owing to energy and commodity prices," says European Central Bank President Jean-Claude Trichet.

European monetary policy officials are still keeping interest rates low, a sign inflation is still in check, but they are going to keep an eye on prices at the consumer level, Trichet says.

"This has not so far affected our assessment that price developments will remain in line with price stability over the policy relevant horizon. At the same time, very close monitoring is warranted."

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Copper and gold could rise 30 percent in 2011, the Wall Street Journal reports. Inflation will be an issue for many countries, and rising consumer prices tend to send investors racing toward gold. Copper prices, meanwhile, will rise as demand outstrips supply. We are...
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2011-54-04
Friday, 04 Feb 2011 09:54 AM
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