Base metals to rally this year on funds

LONDON: Base metals will rally this year as funds are set to maintain their buy-side bias, while strong Chinese growth will overshadow lackluster growth in mature economies, according to Natixis.

The investment bank said in a report this week metals continue to gain acceptance as an asset class, are increasingly used by funds to diversify their portfolios, and are seen as a play on China and on global economic recovery.

"Further investment interest in 2010 is likely to be generated by the acceleration in economic growth in Asian developing countries, as well as potential recovery in OECD economies. We therefore expect that investment funds will maintain their long-side bias," Natixis said.