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.