To The Stars and Beyond! Manic Metals Report 03/27/2025

Copper futures surged once again into uncharted territory leaving it to your imagination just how high it can go. As copper prices have hit a new all-time high the manic metals report is not surprised that it’s there but continues to wonder what took so long. The evidence of the structural shortage is clear and Myra P. Saefong from MarketWatch did a very good piece that included my prediction that copper prices could double and explaining some of the supply deficit situations that the market is experiencing.

She wrote that “ Copper is a critical material used to make many of the thing’s consumers use every day — but it’s importance has taken on new significance as President Donald Trump now sees imports of the industrial metal as a potential national-security risk. “Copper is the new crude oil,” said Phil Flynn, senior market analyst at the Price Futures Group. It’s probably “more important to the U.S. economy right now than oil,” he added, calling it the “new hottest commodity on the globe.” “Everybody needs it, and we probably don’t have enough of it,” Flynn told MarketWatch.

She pointed out that “Data from the U.S. Geological Survey show that domestic supplies of the metal have run at a deficit to consumption for at least the last five years. The U.S. relies heavily on imports of refined copper — importing more than 44% of the average 1.7 million metric tons of refined copper it consumed per year from 2019 to 2023, according to an August 2024 report from S&P Global Market Intelligence, supported by the Copper Development Association.

“Copper is at the heart of the global information economy, responsible for energy creation, transmission and storage,” said Rob Haworth, senior investment strategist at U.S. Bank Asset Management. It’s the “core component for information distribution in our day-to-day lives.”

The metal has many applications, including in construction (for roofing and gutters), the automotive industry (for electrical systems and radiators), electronics and electrical wiring, plumbing, equipment for ships and marine applications (given its resistance to corrosion), and in wiring for telecommunications, according to the Copper Development Association, whose members include copper producers and fabricators.

A single metric ton of copper brings functionality to 40 cars, powers 100,000 mobile phones, enables operations in 400 computers and distributes electricity to 30 homes, according to the International Copper Association, a trade group whose members include many of the world’s largest copper miners. Artificial intelligence and electric vehicles, meanwhile, have been boosting demand for electricity, and by extension for copper, according to CME Group.

We have been discussing copper for a long time and recommending that people hedge their investments. Commercials are heavily invested in copper, and the outlook is strong. The other metals are also performing well after a recent pullback. Silver futures remain undervalued compared to gold, but they are expected to increase. The gold-platinum spread has expanded significantly over the last few months, which is typical for this time of year. We expect metals to remain strong and suggest adding them to your portfolio.

Kitco Gold reported that Gold’s rally above $3,000 has prompted America’s second-largest bank to increase its price target for this year and to solidify its longer-term target. In their latest commodity report, analysts at Bank of America announced that they expect to see an average gold price of around $3,063 an ounce this year, with prices jumping to $3,350 in 2026, up from the previous average price forecasts of $2,750 an ounce and $2,625 an ounce, respectively. The analysts also said that they see gold prices rising to $3,500 within two years.

Last month, Bank of America said that the gold market would need to see investment demand rise by 10% to hit $3,500.

Looking ahead, the analysts have said that concerns over the strength of the economy and expectations that the Federal Reserve will be forced to cut interest rates more aggressively than current forecasts will provide important support for investment demand through the rest of the year. Bank of America also noted that President Donald Trump’s America First policies to reduce its global trade deficit could encourage central banks to further diversify away from the U.S. dollar.

The optimal gold reserve for central banks. Central bank gold demand has been a critical factor behind gold’s rise to the $3,000 level; while global reserves have seen a significant increase in the last three years, Bank of America argues that they still need to go higher. “Looking at gold as an effective portfolio diversifier, central banks have an 11% gold allocation in their FX reserves, up from 5.5% in 2000, so investment in the yellow metal has already come a long way,” the analysts said. “Yet, central banks could diversify further.”

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