Forget the price of gold, copper was the most profitable Covid-19 trade


We needed a hero and we have one. Image of Captain Copper, a superhero created to teach children about metal, courtesy of Chilean state miner Codelco

The price of gold is approaching all-time highs above $ 1,900 an ounce.

Investors are flooding gold ETFs with money that, if ever redeemed against physical bullion, would absorb the output of every gold mine in the world for over a year.

The price of copper? It barely budged from its opening 2020 levels. The indicator metal looks likely to be pushed back by the mythical $ 3 per pound level (last averaged in 2014) for the foreseeable future.

Regarding copper ETFs – since you started reading this article, more money has been invested in GLD than the total assets that the only two copper ETFs in the world have under management.

However, if during the depths of the covid-19 panic you kept your mind on yourself while everyone else lost theirs, your comebacks are crushing golden bugs.

Since copper ETFs aren’t really a viable option (not liquid at any temperature) and futures contracts may be best left with managed money, copper stocks should do that for you.

And they did.

If you picked the Freeport (NYSE: FCX), Southern Copper (NYSE: SCCO), and First Quantum (TSE: FM) Specialists four months ago, you get over 60 returns.

FCX, which regularly features on the most active trading lists, nearly doubled as of mid-March (no doubt benefiting from an additional boost from its gold activity in Papua).

Diversified forestry companies Anglo American (OTCMKTS: NGLOY) and Vale (NYSE: VALE) beat the gold number. 1 and 2 and even the prickly Glencore (OTCMKTS: GLNCY) matched the performance of the big gold.

Allowed; it’s 2020 and it’s hindsight. But eventually the gold rush – and covid-19 – will break down.

Copper was trading at $ 2.88 a pound on Friday – price would need to gain another 58% to hit its all-time high of 2011 (for gold, it’s probably Monday).

This gives you plenty of time to play in the copper market.

For the bullion boys, the new big party of all time is almost over.


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