The Bull Is Running with Copper


"Is copper the new gold? It looks like it is. . ."

Is copper the new gold? It looks like it is and all my fundamental and technical indicators are pointing to higher copper prices. Copper is currently trading around $1.70 per pound and it could head well over $2.00 per pound in the near term.

Here are just a few reasons why you should invest in copper:
  • China's State Reserve Bureau is purchasing mass quantities of copper to build reserves and could purchase another 900,000 tons of copper this year.
  • Copper demand may pick up during China's peak construction season.
  • Copper prices have been hammered in the past year and they seem to have hit bottom. Technically copper looks like it can take off.
  • Coordinated government support measures may revive global economic growth, which will boost copper demand.
  • Falling scrap supplies is leading to lower copper inventories.
  • It looks like there is a decline in copper short positions. We could see a strong rally if speculators quickly cover their shorts.
There is an extremely tight fundamental supply and demand balance for copper around the globe, and the mere notion that we are pulling out of this economic crisis will send copper prices soaring higher.

Obviously, the continued industrialization of India and China will lead to greater demand for copper. In addition, I expect copper production to increase less rapidly than demand as output at producing mines is declining, and a smaller amount of new mines are coming into production due to high start up costs.

Copper is used in every industry and is absolutely necessary to sustain our society.

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