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Bad News, Good News For Base Metals

Gold may glitter, but base metals often are also indicators of global economic health. Two analysts who joined "Power Lunch" agree that the commodities -- used in construction, electronics, healthcare and manufacturing -- are due for a correction. But the downturn may not be as general -- or as soon -- as some investors fear.

Commodity Bubble

Matthew Parry, economist at Moody's Economy.com, is only "mildly bearish" on metals as a whole. He said the aluminum and copper market could be set for a correction, and believes that the latter has risen largely due to "speculative interest." He said that fundamentals "suggest we're entering a mild oversupply" of copper. The economist sees a slowdown over the next year, but not a dramatic one. Instead, he says the decline will merely "trim off the very top of the extremely rapid growth" of base metals.

HSBC's Chief Commodities Analyst Jim Steel pointed out the historic highs in base metals -- but said that until inventories get "a little higher," they likely won't correct "significantly." He declared that a pullback is "broadly" due -- but maintains it may take time for volatility to ease.