Gold and Copper are the place to be !Gold and Copper are the place to be if Russia attacks Ukraine ! Metals prices may rally further if Russia-Ukraine tensions impact supply: analysts
HIGHLIGHTS Market seen pricing in geopolitical risk
Russia major producer of aluminum, nickel and PGMs
Base metals rallied in the week starting Jan. 17 against a backdrop of rising Russia-Ukraine border tensions, higher inflation in major economies and market tightness.
Analysts said continued geopolitical worries over a potential Russian invasion of Ukraine heightened the possibility that new US or international sanctions on trade with major metals producer in Russia could further squeeze tight aluminum, copper and nickel markets.
"Commodity prices could soar if the Russia-Ukraine crisis escalates," said Warren Patterson, head of commodities strategy at ING Economics Jan. 21. "As tensions between Russia and Ukraine grow, so does the risk that it spills over into global commodity markets. Russia is a commodities powerhouse, with it being a key supplier of energy, metals and agri."
Copper reserves
Russia is estimated to hold around 10% of the world's copper reserves and is a major producer of aluminum -- with producers including Rusal accounting recently for some 6% of global world supplies. Nornickel is a major producer of nickel and platinum group metals, key to energy transition. According to ING Economics, Russia currently produces some 43% of the world's mined supplies of palladium.