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COPPER
There is a saying in the market that copper has a PhD in econom-
ics, meaning that it is very sensitive to the state of the economy.
Looking at a chart of copper prices versus recessions one can
see copper price peaks coincident with recessions in 1970, 1974,
1980-1982, 1990 and 2008.
However, copper prices also peaked in 1988, 1995 and 2011.
This is consistent with a change in demand rather than recessions.
Copper has declined in real, inflation adjusted terms over the last 50
years. Mines and miners have clearly become more efficient. Copper
also can be recycled, mitigating short term price crunches, and has
broadly based production around the world. It is a well-supplied
market with little prospect of shortages in the near term. I consider
the copper market to be in a bullish phase when the nominal price
is over $3.00 per pound, which is above the current market price.
GOLD
Gold is a quasi-currency as well as a commodity. Its role in bank-
ing, though diminished from its historical status, is still a major
determinant of gold prices rather than production from mines.
Gold is produced and hoarded and is virtually indestructible.
According to the World Gold Council, approximately 190,040
INVESTMENT
Inflation-corrected 50-year copper price chart. Vertical bars are
recessions. Source: Macrotrends.net
Inflation-corrected 50-year gold price chart. Vertical bars are
recessions. Source: Macrotrends.net
