Last week, I reiterated my bullish stance on gold. You’ve no doubt seen silver soaring to incredible new highs as well. But the metals mania doesn’t stop there. Take copper, which unlike the two major precious metals, is completely reliant on its utility in various business applications, writes Nilus Mattive, editor of Safe Money Report.
Indeed, because it moves solely based on that type of demand, “Dr. Copper” is widely considered a good economic indicator. So, is the fact that it’s also been hitting new all-time highs a sign that the global economy is still humming?
My personal answer is…sort of. Activity related to Artificial Intelligence (AI) remains quite strong. In fact, it’s the biggest force propping up the economy as a whole. Consumer spending, bolstered by investment gains related to AI, would be the other big one.
I continue to believe this is a temporary — yes, bubble-like — situation that could come to a sudden halt at any time. However, copper is a critical component in all the wiring of those data centers.
Just consider the fact that AI data centers require anywhere from three to five times as much copper as older systems. This is why S&P Global predicts the rise of AI could increase copper demand as much as 50% by 2040.
Meanwhile, it’s hard to come up with new supplies. Even if there are known deposits, developing new mines takes a ton of time and involves endless red tape…especially if you want to operate in stable jurisdictions.
The real takeaway here is that MANY metals and related investments have been soaring in value for a whole range of different reasons. So, if you don’t have exposure to them as a trader, you’ve been missing out.
Adding some actual tangible assets — as well as stocks related to commodities and tangible assets — is a great way to further diversify your portfolio and prepare for a wide range of different market environments. Copper investments are just another piece of that larger puzzle.
