For months, we have been highlighting to our readers that China’s economy is beginning to pick up which could positively influence commodity prices. The fears of a slowdown were overblown.
China’s stock markets (FXI) have been rallying since early September because speculation is rising that the newly chosen Communist Party may boost the economy. The China 25 index fund (FXI) is approaching a major 52 week high breakout.
This may be impacting iron ore and industrial metal prices which have moved higher as Chinese industries may be beginning to aggressively stockpile ahead of 2013.
Uranium and rare earth miners are outperforming gold miners by at least 13 percentage points over the past month. This may be forecasting a risk on rally as investors speculate that China, Japan and the emerging economies are bottoming.