It almost has the air of a Scooby-Doo mystery. The canine sleuth and his gang are confronted by mysterious ghosts, but once the mask is uncovered it turns out to be the local banker.
The phantom in this case was the mysterious buyer of more than half of the world's copper stockpiles traded on the London Metal Exchange. And while the identity of the trader has not been confirmed, speculation among commodities insiders has unmasked a banker, namely J.P. Morgan. The London Daily Telegraph cites "sources close to the situation" in naming J.P. Morgan.
The motive leading LME traders to finger Morgan is the firm's plan, announced in a public SEC filing in late October, to launch a physically backed copper exchange traded product.
The heavy buying also explains why the price of copper has soared recently to its highest level in over two years, at over $8,700 per ton.
LME officials have sought to assure investors that the large-volume trading is not an indication of disorder in the copper market and that there no attempt is being made to corner the market. The infamous cornering of the silver market by the Hunt brothers in 1979 caused the price of silver to jump from $6 to the all-time high of $48.70 per ounce.
