Unearth the benefits of investing in copper — and learn why now may be the best time to buy
When investors discuss precious metals, nine times out of 10, they seem to be talking about gold and silver.
Platinum and palladium enjoy the spotlight every once in a while, but gold and silver hold the lion’s share of attention when it comes to the metals market.
One overlooked metal that doesn’t get the same press coverage as its glimmering peers is copper. What copper may lack in aesthetics (compared to its popular yellow cousin anyway), it makes up for in other important ways.
For example, copper is one of the most useful metals on Earth, outpacing all other metals in terms of growth.
In fact, thanks to significant demand worldwide, copper’s spot prices are up 393 percent from their lows in 2001. 393 percent!
Meanwhile, gold is up only 151 percent, silver 188 percent, platinum 202 percent and palladium 122 percent.
Still not sold? Here are three more reasons to consider adding copper to your investment portfolio:
1. Skyrocketing Demand
Demand for the red metal is primarily driven by industrial use. The properties of copper make it a very efficient conductor of electricity, as well as strong, flexible and resistant to corrosion.
Thanks to these qualities, copper is used in nearly every major industry you can think of: transportation, engineering, machinery and equipment, electrical, building, automotive, computers and more. In fact, copper is an essential component of whatever gadget you are using to read this article right now.
Because of its crucial function in industries relating to construction and development, investors are commonly advised to buy copper if they believe in growth.
For example, to build a modern skyscraper takes a lot of heavy machinery, technology, and electrical power. Not to mention, people moving to cities need some form of transportation to get to work. All of this requires large quantities of copper.
Development is a key driving factor behind copper prices in recent years, especially in China, India and other Asian countries, which are rapidly progressing economically, and improving standards of living. It’s no wonder that Asia alone consumes nearly half of the world’s supply of copper.
In the United States, copper consumption has increased by nearly 700 percent since 1990, and data shows demand driven up in the near future.
2. Slowing Supply
On top of skyrocketing demand, global copper supply appears to be drying up. The last significant copper mine was uncovered nearly a century ago and there hasn’t been a new mine discovery since.
Do a quick Google search and you’ll find story after story of copper shortages happening in the last few years, and many forecasters are bracing for the inevitable copper scarcity on the horizon.
When the amount of copper injected into the market is unable to sustain long-term demand, production will have to slow to a crawl and prices will shoot up — unless new copper deposits are discovered soon.
Furthermore, factors like political instability, natural disasters, labor disputes and major accidents can all interrupt the production of copper and put a stop to short-term supplies.
3. Diversification Helps
The exponentially-increasing rate of demand, as well as the diminishing supply, ensures that copper will retain and even grow its value in the long term, making it an obvious choice for serious investors who want to diversify their financial portfolio.
It is said that Ancient Chinese merchants came up with a unique way of reducing risk. They would divide their goods among several ships. That way, in the event that one ship was capsized by a storm or attacked by pirates, at least the other ships stood a good chance of making it through and the shipment wasn’t a total loss.
The same tactic can work for modern investors, too.
While diversification doesn’t guarantee avoiding a loss, it does help shield your portfolio from the ebb and flow of the market. Therefore, the more you diversify, the better prepared you will be to manage risk.
Precious metals in general act as a safeguard from volatile stocks, bonds and cash alternatives. And by putting at least some of your assets into an industrial metal like copper, you can diversify even further to protect yourself against losses.
Where Can I Buy Copper?
Copper is a great metal to own if you want to protect your wealth for less cost than gold and silver.
Please note: since copper is used extensively for industrial purposes, make sure to buy refined, high quality copper bullion, as opposed to scrap material used by manufacturers.
At Provident Metals, we sell premium copper bullion bars and coins to help investors claim a stake in rare metals, while affordably securing their savings.
Browse our website to see how you can invest in pure copper rounds, bars and even bullets.
Adrian Jones says
I like how you mention that when it comes to copper, one should always keep in mind that due to its demand, it is one of the investable metals since it is used a lot in an industrial setting. Another thing to keep in mind is that making sure that there is a steady supply of copper would help relieve the heavy load on how much people use the metal. While I have no idea how to be able to use metal, I would have to agree that it is one of those kinds of metals that would still see a lot of use over time as the years go by.
Missy Malone says
“In fact, thanks to significant demand worldwide, copper’s spot prices are up 393 percent from their lows in 2001. 393 percent!
Meanwhile, gold is up only 151 percent, silver 188 percent, platinum 202 percent and palladium 122 percent.”
Cryptos like Etherium are up 5000% in half a year and Bitcoin is way more than this.
I am a huge believer in metals as a preserver of wealth but copper is purely a novelty, a kilo bar is just a desk paperweight to remind you get silver.
Derek Dewitt says
I had no idea there was such a high demand for copper wire these days, let alone no new mines for supply! It’s unfortunate that there is such a shortage of it because it’s used for almost all electrical machines and buildings. I think investing in copper now can make a huge impact down the road. Thanks for sharing!
R.L. says
Correct me if I am wrong but copper spot is by the pound. Which is currently $2.14. Most of the 1 pound bars are listed for almost $7 per bar. So spot would need to triple for you to even get close to making money….please advise.
ProvidentMetals.com says
Basically, it’s very expensive to produce copper bullion, which is why there is such a disparity. If copper were to increase in price and balance the costs, there would be a better spread. It is a lot cheaper in it’s raw form, but it’s not easily monetized and it’s not as pure (hallmarked as 999 fine for example). Many of our customers consider copper to be a speculative “investment” or a novelty.
Jacob Hamilton says
I am fairly new to the precious metals world but I have managed to put away a nice little pile of silver and have started putting back copper. Most of which I have got through provided metals. I have been overwhelmed by their wonderful service and fair prices. If you are thinking about buying id go through them im going to continue to.
Forrest says
Who is ‘Provided Metals’ and where are they located? Do Provided Metals have a good selection of Copper? Do Provided Metals have a better selection than others that sell Copper?
ProvidentMetals.com says
Thanks for the questions. Provident Metals is located in Dallas, TX. We carry a broad selection of copper bullion that features rounds manufactured by a variety of mints, including some exclusive to Provident Metals.
Occasnl Trvlr says
For anyone considering a purchase of copper as an investment or as bullion, they must bear this in mind (as stated in the article):
Copper is an industrial metal, not a precious metal.
Even though copper has, at different times and in varying places, been used as a monetary metal, it does not hold sufficient value to be a meaningful hedge against the frailties of fiat currency.
Precious metals are a hedge, or insurance, against currency-related monetary and economic problems, whereas an investment in copper is bet on economic recovery and growth.
Having said this, I do own a little copper. In days to come, prudent farmers may be happy to trade a little produce for some copper – after all, just as stated in the article, it is a tremendously useful material.
MisesDaMan says
You say that copper is up 393% compared to gold (151%), silver (188%), etc… But a quick review of the spot prices from 2001 compared to now reveal a much different story. Here is some math. Gold at the end of 2001 was $276.00 or so. It is now about $1,300. A 100% increase would be a doubling of price. So, to say that gold is up only 151% is to say that the current spot price is: $693 or so. $276 x 1.51 = $416 + $276 = ~$693. My math may be incorrect, but the gist of my assertion isn’t. What are your thoughts?
marvin says
if you are investing a good amount of cash on, you will need a ware house to store it in, or one hell of a shed you can secure in.. I am a firm believer in, if you can’t hold it you don’t own it, I do not let anyone keep my metals for me…