COMMODITY CORNER

Copper

The most recent Gold & Silver craze is well underway over the past couple of years, despite some questionable activity in the futures markets, with stubborn inflation, the sinking value of the U.S. dollar, and the threat of digital assets potentially replacing cash. The Gold Bugs have been out in full force, as history says that investors flee to gold during unfavorable economic times, and a shrinking currency. 

     A much lesser recognized metal – Copper (originally discussed in our Commodity Corner – Copper blog, dated 6-10-24) has recently become increasingly important. There are several potential uses for copper, including electronics, appliances, power generation, homebuilding, and electric vehicle manufacturing (which requires 3x the amount than a normal vehicle), though the demand would suffer during a slowing economy/and or recession. Copper, after years of being ignored, has also resurfaced as a vital component to the AI Data Center supply chain, AND there is a supply shortage! This is expected to last for a decade, and new mines are not the immediate answer as it takes 15-20 years to bring a major one online. 

      Future demand will also include this metal for wind turbines (which require 4-5x per megawatt than coal), and billions of dollars to upgrade the national power grid, which requires millions of tons of copper. As a result, the cost of copper, per pound, is expected to triple in the next few years. 

      As noted in Chapter 1 of our publication, When to Buy and When to Sell: Combining Easy Indicators, Charts, and Financial Astrology (available on Amazon), and our blog two years ago, we noted that precious metals spot prices can be manipulated in the global market, and experts in the field indicated at that time many of these assets were greatly undervalued, and were being price controlled by authorities around the world who were purchasing large quantities to back their new currencies. This contributes to the volatility of all metals, so be patient and wait for the best opportunities on pullbacks. 

      Exchange Traded Funds (ETFs) that are tradable on the U.S. Markets include CPER (a copper fund index), COPX (miners), and COPJ (junior miners – with a large dividend), which are tradable on the U.S. market. The price of this metal was depressed for a couple of decades, but has now again started to move, despite a recent pullback. Charts are also showing buying pressure once again, which could ignite a whole new bull market in the near future.                                          

      In Astrology, the planet Venus “rules” copper, and recently transited the sign of Taurus (which is ruled by Venus as well), from March 30 – April 24, where it thrives historically. Once again, immediate gains were realized from Day 1 (March 30) (which signified a 4-month swing low), gaining 26% through the first 3 weeks. It then cooled off slightly as it entered Gemini (ruled by Mercury), but has resumed its climb in recent days. As noted earlier, the buying pressure has been mounting, and a break-through of resistance will likely result in another rally.

      This, and the expected shortage in supply, suggests that copper may not only be tradable to the upside, but also a solid long-term investment.

      On this website, and in future blogs, we will continue to monitor and discuss these possibilities.

*** As always, this information is not intended to be financial advice, and should not be considered as any specific buy or sell recommendation, but rather a guide to assist the reader in some further understanding of the financial markets.