Copper

Portfolio diversification
This base metal hasn’t received nearly the press that its precious peers: gold, silver, platinum and palladium have, but it should. Though copper is neither a precious metal nor a source of energy, it boasts indispensable industrial, technological and economic uses and is one of the most important nonferrous commodities today.

Industrial Demand
Copper is one of the most useful metals on Earth. It is an efficient conductor of electricity. It is flexible and strong and it doesn’t corrode easily. It is used for heating, air conditioning, plumbing, roofing, adapters, computers, cars, mobile phones, wiring, electrical leads, transformers, motors and lighting units. In short, copper is used in nearly every major industry of the world.

Performance
In addition to its economic significance, it has had quite a run thus far in today’s commodities bull market. Copper has surged from just under $3 per pound to over $4 a pound over the past calendar year. That’s a gain of over 33 percent, and that means copper has risen faster than the price of gold over the same period of time. There are a number of real and perceived reasons for the rise, but chief among them has to be the looming threat of inflation. If the dollar continues to fall, the true cost of copper will rise relative to the fall in the dollar. That, coupled with growth in India and China, has investors pouring into the conductive metal ore.

Investment outlook
Copper isn’t as glitzy or glamorous as gold or silver, but in many ways it feels safer. Since copper is regularly used in electronics, its consumption per person, particularly in the developed world, has been on the rise for decades. Global inventories are down and demand is up as the world economy grows. The bottom line is this reddish metal we call copper continues to show future promise in this exciting secular bull market.