Metals: How long will this rally run? - Natixis

The blistering performance displayed by metals last year has attracted some attention as Bloomberg’s base metals index, which consists of copper (44% weighting), aluminium (27%), Zinc (15%), and nickel (14%) futures posted a ~28% gain in 2017, notes Bernard Dahdah, Research Analyst at Natixis.

Key Quotes

“Metals markets exhibit momentum in their price trends. Simple strategies that buy winners and sell losers can produce higher profits in the long run compared to passive strategies.”

“We believe this behaviour can be used to improve the effectiveness of investment and hedging strategies as it provides investors with an extra tool with which the current market can be assessed.”

“The momentum achieved in 2017 has begun to dry out, but has not yet reversed. As such, the markets are trading in a range, and a clear trend is not evident.”