At least investors have more opportunity to study closely the probability of approval before they get ahead of themselves again.
Retaining its sheen
Even base metals like copper haven’t been immune to the sell-off in precious metals, despite what ought to be a counterbalancing reaction. Base metals should rise as precious metals fall, since the lack of a need for a “safe haven” suggests better times ahead.
Yet because China is such a key piece of the entire global economic puzzle, its softer first-quarter GDP growth of 7.7% reported the other day is putting pressure on base metals too. Taseko Mines Limited (USA) (NYSEMKT:TGB) fell 5% yesterday as it seemed to indicate it was expecting copper prices will weaken as the year progresses.
The copper miner implemented additional hedging strategies to protect its downside, putting in place put options for 40% of production at its Gibraltar mine at $3 a pound for the first quarter of 2014. Copper currently trades for around $3.25 per pound, and Taseko Mines Limited (USA) (NYSEMKT:TGB) already has put options in place for the first half of 2013 at $3. But with put options in the back half of the year set as low as $2.75 per pound, it seems the miner is projecting significant weakness.
However, I’m still bullish. I see a copper boom coming, and with its latest round of hedging activities, you could say Taseko is looking more bullish too. Particularly in light of Rio Tinto plc (ADR) (NYSE:RIO)‘s massive wall collapse at its Bingham Canyon copper mine in Utah the other day, there could be a supply deficit coming again that tilts pricing in the favor of miners.
I think Taseko’s stock collapse, with its shares down 42% from recent highs, is overdone.
The article Telecoms Disconnected as These 2 Stocks Tumbled originally appeared on Fool.com.
Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.