The recent downdraft in energy prices bodes well for metals such as palladium, aluminum, nickel and zinc, says BMO Capital Markets. Nymex January crude oil fell as far as $63.72 a barrel Monday. On a futures continuation chart, this is a five-year low. Oil weakness has pulled a number of commodities lower on sympathy selling lately. “While the commodity complex tends to trade in tandem, BMO notes that in an environment of low energy prices, there are end-use sectors that should benefit over time, and this in turn could differentiate demand dynamics within the metals complex at the margin,” BMO says. “Increased spending power for consumers should boost demand for the ‘three A’s’ — automotive, aerospace and appliances. As such, BMO estimates the ‘winners’ would be palladium, aluminum, nickel and zinc.”
