Follow the copper price in real-time and learn more about investing in copper.
Why Invest in Copper?
Copper is an essential element in modern technology. Its electrical conductivity, malleability, and resistance to corrosion make it indispensable for a wide range of industries and applications, from electrical wiring to construction materials. Learn more about investing in copper below.
Copper is essential in the growing renewable energy sector, especially in wind and solar technologies.
With the rise of electric vehicles, the demand for copper is expected to increase, potentially driving up its market price.
The finite supply of copper, coupled with increasing demand, supports its long-term value appreciation.
How to Invest in Copper
Industrial demand, technological advancements, and global infrastructure projects primarily influence the price of copper. In a diversified portfolio, copper gives exposure towards continued global growth. There are different ways of adding copper to your portfolio. Below are the three most common ways to invest.
Daily Traded Funds
A daily traded fund focusing on copper has a professional fund manager who makes sure that the investment portfolio performs. This option is often suitable for investors who do not have time or interest to find the best copper investments themselves.
Exchange Traded Funds
Exchange Traded Funds (ETFs) track an index and give exposure towards a basket of equities. ETFs focusing on copper typically invest in a variety of mining companies and other enterprises involved in the production and sale of copper rather than in the commodity itself.
Copper Mining Stocks
Copper mining stocks give exposure towards the copper price without holding the underlying commodity. The stock price of copper mining companies often has higher volatility than the price of copper. This makes it important to diversify the portfolio risk by holding multiple companies. This can also be achieved by investing in a copper mining fund holding copper mining stocks.
Copper derivatives are financial instruments whose value is based on the underlying price of copper. These instruments enable leveraged positions on the copper price and can offer high returns. They can be complex, often associated with high risks, including counterparty risk, and are more suited for short-term trading rather than long-term investments.
Copper is an indispensable industrial metal and has played a crucial role in technological advancement throughout history. The price of copper is influenced by supply and demand, global industrial activity, and technological innovation.
Copper is integral to modern life. Its excellent conductivity and anti-corrosive properties make it a key component in electronics and electrical wiring. The healthcare industry benefits from copper's antimicrobial characteristics, while the construction sector relies on it for plumbing and roofing. Additionally, its significance is growing in the renewable energy sector as a vital material for wind turbines, solar panels, and electric vehicles. The metal's extensive applications and critical role in various industries highlight its versatility and ongoing importance as an industrial commodity.
Things to Consider Before Investing in Copper
- Risk Assessment and Time Horizon: While copper is highly liquid, its price can fluctuate. The price of copper often moves depending on the state of the world economy since it is widely used by industry. Evaluate your financial standpoint, your willingness to take risks, and your time horizon before you invest.
- Portfolio Allocation: A well-diversified portfolio should allocate 15-40% towards commodities, including copper. This approach is reflected in some of the most discussed portfolio strategies, such as Ray Dalio's "All Weather" portfolio and "The Dragon Portfolio". During periods of significant economic uncertainty, or when the price of copper is undervalued compared to other assets, it can be strategic to increase holdings in copper.
- Investment Method: Each investment strategy comes with its unique set of advantages and drawbacks; hence a comprehensive assessment is necessary to ensure it corresponds with your investment objectives and risk tolerance. For instance, investing in copper stocks might offer diversified exposure and higher returns, but also introduce company-specific risks.
- Sustainability: Responsible investing has been gaining momentum, where new standards are being instituted to promote genuine sustainable investments. Funds must disclose their sustainability profile and provide documents proving this on their website. If sustainability is important to you as an investor, it might be wise to research the sustainability profile of your investment.
Factors Influencing the Copper Price
Understanding the multiple factors that impact the price of copper is essential for those considering investing in this vital industrial metal or tracking its price for various economic purposes:
- Supply and Demand Dynamics: A foundational economic principle, the balance between supply and demand, is pivotal in determining the copper price. Demand for copper primarily stems from sectors like construction, electronics, power generation, and transportation. On the other hand, supply originates from copper mining activities and the recycling of used copper products.
- Mining Disruptions: Events such as labor strikes, mining accidents, or geopolitical issues in key copper-producing countries can affect the supply of copper, pushing prices upwards.
- Global Economic Health: As copper is widely used in various sectors, its demand often mirrors the global economic health. A booming global economy generally means increased copper usage, pushing the copper price up.
- Government and political initiatives: Regulatory changes or infrastructure initiatives in major economies can affect the copper market price, especially when copper usage is anticipated in significant quantities for projects like electrical grids or housing developments.
- Green Energy Transition: With the global push towards cleaner energy solutions, the demand for copper in green technologies, such as electric vehicles and renewable energy installations, can influence the copper price real time.
“Doctor Copper” – Predicts the health of the global economy
The price of copper is often regarded as a thermometer for the global economy, earning its nickname: "Doctor Copper." This is because copper's widespread use in various sectors, from construction and infrastructure to electronics and transportation, makes its demand highly sensitive to economic cycles.
A rising copper price typically signals robust industrial activity and a booming economy, as builders and manufacturers consume more for development and production. Conversely, a decline in the price of copper can hint at a slowing economy, with reduced demand suggesting industries are bracing for tougher times. This close correlation with economic health allows the price trends of copper to serve as an early indicator of global economic trends.
Why Invest in Copper with AuAg Funds?
Metals like copper are foundational to various sectors of the modern economy. Investing in copper provides investors exposure to one of our time’s most important trends: the green transition. AuAg Funds champions this transformative journey by endorsing sustainable mining practices. We invest in forward-thinking companies and uplift pioneers in the domain.
The mining sector remains a significant source of greenhouse gas emissions. Yet, metals, especially copper, are quintessential for products like electric vehicle batteries, advanced electronics, and green energy infrastructures. Realizing a sustainable future is interlinked with metals like copper, lithium, silver, and other crucial metals. AuAg Funds hence invests in and works with mining companies, supporting them to allow for more sustainable methods in metal extraction.
Explore our Copper Funds
AuAg Funds provides investors with a suite of funds designed to give exposure towards copper and other metals that are important for our world. Our portfolio includes investments in copper mining companies, offering an excellent addition to a traditional asset portfolio.
AuAg Essential Metals
AuAg Essential Metals provides investors exposure to a commodity fund focused on metals needed in a high-tech and green future, including copper, lithium, aluminium, steel, cobalt, and more. The fund provides exposure to a broad metal portfolio, investing in mining companies focusing on industrial and new tech metals, and consists of 25 equal-weight holdings.
AuAg Precious Green
AuAg Precious Green embraces the global green revolution, where our fund reinvents the classic 60/40 investment strategy. With a prime focus on companies within green-tech and essential metal extraction, 60 % of the fund is allocated to these sectors. The remaining 40 % is allocated in precious metals, predominantly gold, ensuring a robust safety net for investments.
FAQ – Copper Price
Copper is usually priced in USD per pound or USD per ounce. But this will vary depending on where you are. The copper price in Europe is usually priced as euro per kg, while in Sweden the copper price is usually shown as SEK per gram or kg.