Lead and copper far outshine gold in 2009

Base metals rise 5 times more than gold, with little fanfare.

By Jon D. Markman Dec 27, 2009 6:12PM

Gold bugs have a cool nickname and get a lot of press, but their favorite investment instrument has not even come close to being the best-performing metal this year. That distinction goes to its redder big brother, copper, and, it's followed not too far behind by just about every other base metal -- including, most prominently, lead and nickel.

If that's a surprise to you, it's mostly because lowly copper and lead just don't call as much attention to themselves as gold. I didn't see too many ads for copper or lead necklaces this holiday season, and I have never heard anyone brag about being a lead bug.

But, boy, have they captured investors' attention since the start of 2009 because of their usefulness in heavy industry. Using exchange-traded funds tracking their futures prices as a measure, here are the numbers: Copper (JJC) is +131%; lead is (LD), +124%; steel (SLX) is +115%; nickel is +57%; and aluminum (JJU), is +36%.

Meanwhile that flashy braggart, which claims highfalutin' powers to cast a spell on inflation? It's up just 25%. Going forward, copper continues to have the best prospects due to its utility in power plants, power grids and plumbing. A single leveraged fund that captures the group is PowerShares DB Metals Double Long (BDD).

Jon Markman is the weekly SuperModels columnist at MSN Money. He publishes a daily investment newsletter, Strategic Advantage, and a weekly trading letter, Trader's Advantage. He is also the author of a new annotated edition of the 1923 investment classic, "Reminiscences of a Stock Operator."

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