Freeport McMoran Copper (FCX) is a miner of copper, gold and molybdenum. It has operations in North and South America, Indonesia and Africa, and competes with other miners such as the Southern Copper (SCCO), Codelco and Newmont Mining (NEM).

The world is screaming for copper. Demand from China, the U.S. and Europe is pushing prices to all-time highs. London copper traded at $10,000 a metric ton. On the New York Mercantile Exchange, copper hit $.4.58 a pound, as reported in the Wall Street Journal.

Traders are looking for "five dollar copper," which would push London's price to $11,000 per metric ton. Goldman Sachs (GS) forecasts that copper will average $10,230 a metric ton in 2011, up 15%. It warned that new mine capacity will not come to market for at least two years.

With the surge in copper prices -- and other industrial and precious metals -- it was no surprise that Freeport-McMoRan Copper & Gold (FCX) had a great quarter. Net income rose 60% to $1.55 billion or $3.25 per share. Excluding a $0.01 charge, the earnings handily beat the consensus of $3.03. As for the top line, revenues increased 22% to $5.6 billion. The Street estimate was for $5.47 billion.

Despite all this, the stock was off nearly 6% early Thursday. No doubt, one reason is that it has had a strong run over the past few months and the valuation was getting overextended.

Newmont Mining (NEM), first discussed here on June 3, 2009, at a price of $46.42, retreated slightly in late 2010 after pushing through $65, but that may be viewed as opportunity to consider the shares, if you missed the June 2009 entry point.

Newmont has the right commodities for globalization's third decade: copper and gold. However, it's not a stock for squeamish or low-risk investors: Newmont's stock practically defines uptrend volatility. Therefore, if you're looking for a steady, predictable, staircase north, it's probably best to skip NEM.

Looking back can be painful, especially if you missed the biggest bull move of the year. The star performer was palladium, which is used in catalytic converters. The metal rallied 95% during 2010, according to the Financial Times.

One major reason for the jump was the belief that Russia has exhausted its stockpiles of palladium that they had accumulated during the Cold War. The big metals trader, Johnson Matthey, said that palladium could swing into a "serious deficit" if sales from the Russian government diminish.

On the futures market, March palladium touched $800 per ounce. Some analysts are forecasting $1,000 per ounce in 2011.

Over the years there have been some strange goings on in the commodity markets. One episode that comes to mind is the attempt by the Hunt brothers of Texas to corner the silver market in the 1970s.

Now we have another strange occurrence. The Financial Times reported that one trader holds 80% to 90% of the copper in the London Metals Exchange (LME) warehouses, valued at about $3 billion. We do know that JPMorgan Chase (JPM) is a big player in the copper market. Whether JPMorgan increased its holdings is not known.

Over the past couple of weeks, a mystery trader purchased more than 50% of all the copper stocks on the London Metals Exchange, valued at over $1 billion. There were rumors that whoever it was is trying to corner the copper market.

As it happens the mystery bank is JPMorgan Chase (JPM), The Wall Street Journal reported, citing The London Daily Telegraph. The bank bought some of the copper for clients. But the bank owns a large chunk, estimated at 175,000 metric tons.

Gold keeps powering to new record highs amid a battery of speculations. Mari Kooi, CEO of Wolf Asset Management International LLC, sees gold rising 64% to $2,200 per ounce, Bloomberg reported.

If we look for a key reason for the gold rally, the most obvious one is the weak U.S. dollar. Kooi believes the dollar will fall another 20% within the next 12 months. A falling dollar will spark higher commodity prices and create inflation.

The dollar "will fall as people perceive that the Fed will do anything to fuel growth," Kooi told Bloomberg. "Commodities are going to be a hot thing."

First off we should distinguish between precious metals and base metals. Copper and zinc fall in the category of base metals. Base metals are used in construction and products. So copper and zinc are more a supply-and-demand play than precious metals. The prices of base metals move almost in lock-step to basic supply.

Goldman Sachs Group (GS) has an international division that specializes in commodities. Much of the data comes from London, which is a hub for commodities trading. The London Metals Exchange (LME) is where this trading takes place. Traders like Goldman can monitor trading and inventories at the LME and run estimates of supply and demand based on trading activity, both on and off exchanges.

I'm betting on a substantial rise in copper prices. It seems like a sure bet to me. As global manufacturing interests are attempting to excite production and governments are attempting to re-energize consumerism, warehouse supplies of copper have been declining.

Yet, this alone is not what piques my interest. Two other significant factors are converging with a reduced copper stockpile, creating what I see as an undeniable, medium-term investment opportunity.

Why has the price of tin jumped in recent weeks? The economic rebound in Japan and parts of Europe has spurred increased demand for the commodity. Tin is used for soldering, especially in electronics. Inventories are down 50%.

The increased demand has come with falling production, especially in Indonesia, the world's largest producer. Tin prices have risen 30% in two months. On the London Metals Exchange (LME), tin traded as high as $20,750 per ton. This is the highest level since August 2008.