Even though gold continues to hog the limelight as an inflation hedge, nickel, the base metal that finds usage in stainless steel, has been the best performer in commodities segment in the past three months, said commodities analysts.
Analysts at MF Global, the Chicago-based research firm, said they expect nickel to touch a price band of $17,000 a tonne, close to double where it was priced four months earlier.
"Nickel is at $16,360, up $110. The sharp move higher seems to have reversed the double top formation that seemed to be taking hold, and we are now on track to test next resistance at $16,630," said analysts at MF Global. MF Global set the target price for nickel at $17,000 a tonne.
Nickel had suffered with other base metals, according to market reports published earlier. The metal was priced at $9,500 an ounce in February this year.
The World Gold Council (WGC) in its July report took a special mention of Nickel and said that it is by far the best performing [on a quarter-on-quarter basis] of the commodities that we regularly monitor, rising by 70 per cent during the quarter, followed by oil, which was up 47 per cent [Brent crude].
Tin and lead also posted hefty price increases, rising by 43 per cent and 36 per cent during the quarter respectively. However, like equities, this still left most commodities prices [the only exception was lead] well below their year ago levels.
A price graph of London Metal Exchange shows that nickel rose from a price range of $9,500 to $9,600 a tonne on April 01 and headed towards $16,000 a tonne by the end of June sketching a volatile graph. According to Global Insight from Bloomberg, quarter-on-quarter returns on nickel stood at 70.2 per cent in the second quarter. Next was oil [Brent crude], which offered a 46.5 per cent return.
Tin was the third on the list of best performers, with returns of 43.4 per cent in the second quarter.
Lead, copper, aluminium, zinc and palladium were the other good performers. The prices of silver, platinum and gold rose the least and on a quarter-on-quarter basis.
Nickel, according to Global Insight and the WGC, was also the best performer from April to June with the 22-day price volatility of 43 per cent.
Lead was the most volatile with a 22-day price volatility of 56 per cent. Market price fluctuations eased in the second quarter, as the flow of bad news ebbed and the number of financial and economic shocks lessened.
Nickel is at $16,360, up $110. Yesterday's sharp move higher seems to have reversed the double top formation that seemed to be taking hold, and we are now on track to test next resistance at $16,630. At the London Metal Exchange, spot price of gold stood at $16,300 a tonne.
Nickel futures for delivery 15 months later was priced 16,490 a tonne.
According to China's National Bureau of Statistics, nickel production inched down 0.8 per cent on the month to 17,419 tonnes after a rise of 24.5 per cent in May.
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