It is time to accumulate metals and mining stocks. But we also advise investors to take their time accumulating, using the inherent volatility of the market to maximise the risk/reward of their investment. We review our five signal approach to maximise risk/reward investment opportunities in the sector.

Commodities to watch: thermal coal, copper, zinc & gold
We have only made modest changes to our commodity price forecasts. Short-term base metal prices are pared to reflect recent aggressive sell-downs; bulks' forecasts are broadly unchanged; precious metals are marginally higher. Our preferred commodities over the short- to medium-term are thermal coal, copper, zinc and gold. We still like copper and met-coal longer-term.

Eoin Treacy's view Many industrial resources experienced a very sharp pull back from their April highs, lead and zinc hit medium-term peaks in January, and have since pulled back below their 200-day MAs. However, all six exchange traded metals found support in June and have rallied steadily since.

Tin remains the clear leader in the sector and never fell below its MA. It hit a new recovery high last week and a sustained move below $17,000 would be required to question scope for further upside. Copper pushed back above its MA last week, aluminium, lead and nickel this week and zinc is testing its 200-day MA. If they can hold approximately half of their recent gains on the next pullback we can expect additional gains over the medium term.

Thermal/Steaming coal remains in a consistent medium-term uptrend and while somewhat overbought in the short-term a sustained move below $60 would be required to question upside potential.