Is Copper a Precious Metal Now?
Source: Commodity Online (10/14/09)
". . .analysts believe copper could play an increasingly significant role in helping mining companies boost production."
Copper price staged a stunning turnaround earlier this year, long before economic recovery appeared on the horizon.
From a low of about $1.25 per pound last fall, the price of the metal used to make wires and pipe has recently traded at close to $3 a pound. In fact, copper is acting like a precious metal.
Some investors are treating it more like silver, platinum or gold, buying it as a hedge against currency fluctuations, potential inflation or even as a store of long-term value.
According to analysts, there are elements in the market that want to hold copper as a hedge very much like they would keep gold.
Some analysts believe that copper could play an increasingly significant role in helping several mining companies boost their production.
The longer-term trading of copper will be based more on fundamentals of supply and demand. But there is a currency component to the point that people having a negative view on the value of currencies believe one way to hedge, somewhat, is to buy commodities. So copper is benefiting from that.