After silver and gold reached record highs, traders are now watching another metal closely
At a time when the market is in choppy waters, investing in precious metals is a safe option to weather the storm. During the year 2025, gold and silver prices reached record highs, triggering a bull run that the market had never experienced before. As the two precious metals keep surging, copper is joining the league. The metal known for its ability to gauge the health of the global economy is up roughly by 38% this year, and its run is expected to continue into 2026.
On Friday, while U.S. stocks held steady at near all-time highs, the metals broke new ground. Front runner was silver, which surged 7.7% to around $76.49/troy ounce, extending its record yearly run during which its prices more than doubled. Following silver were gold futures, which also surged 1.1% to $4,529/troy ounce, according to the Wall Street Journal. In the shadow of the two metals, copper has been rising monumentally, making headlines. It is up 36.7% this year, approaching $12,000 per ton, its biggest annual gain since 2009, and its recent bull run propelled the metal to a record high of $5.839/lb earlier this month. With the second phase of a commodities supercycle approaching, the red metal is primed to grow well into the next year.
According to Investopedia, rate-cut expectations, poor performance of the dollar, and geopolitical anxiety are fueling the metal rallies. Furthermore, copper has been rising due to the massive need for it in the development of AI data centers, EV expansion, and electrical grid construction. As per Goldman Sachs, grid and power infrastructure are projected to drive 60% of copper demand growth through 2030, while BloombergNEF suggests that copper demand for data centers could reach a whopping 572,000 tonnes annually by 2028.
On the other hand, there have been supply chain issues with miners tackling depleting ore grades, and operational disruptions in Chile and Peru. The Trump administration also slapped a 50% tariff on imported copper products, triggering a hoarding rush that J.P. Morgan expects to continue in 2026.
While the demand has been steadily growing, it's the traders who are bringing copper into the U.S., anticipating tariff hikes and price surges. According to Investing.com, this has added to the woes of the strained supply chain and created an 'artificial scarcity.' The publication suggests that speculative momentum traders are capitalizing on the trade dynamics and possibly stockpiling the metal. Once the tariff-related threats fade, supply stabilizes, and the trade routes normalize, the excess inventories could hit the market and trigger trades to unwind.
Thus, the key to capitalizing on this supply-demand mismatch is to identify the stocks of the right companies with strong fundamentals that can convert higher copper prices into free cash flow, without taking on excessive risk, MarketBeat suggests.
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