Copper Registers New Highs in Row| Influencer‘s Insight •Jasper Lo

When silver made a rush for gains, many reporters and investors inquired about its outlook and asked whether they could continue going long until it reached $50. I replied that silver prices might turn tepid as dragged by the weak gold, since both of them are precious metals. These people believe that financial markets are betting on economic recovery amid vaccine rollout, which will push silver higher for its industrial demand. However, my answer is copper futures will outperform silver. In the metal market, its base metals rather than precious metals that will benefit most from economic revival.

In addition to economic recovery, the bullish outlook for silver also comes from its use in electric vehicles. But online experts said that the copper usage for each battery electric vehicle was 83kg on average, considerably more than that for traditional vehicles with internal combustion engines. It shows copper is bound to see higher demand than silver. Besides the above two factors, traders should keep an eye on global geopolitical tensions. Live-fire drills on an unprecedented scale occurred last year. As a result, a mass of copper was required to manufacture the large number of bullets and weapons, which jolted copper futures upwards. Some investment banks pointed out that the copper market this year had suffered the largest shortage in history, and such a shortage would continue in the coming months. Considering the London Metal Exchange has signaled copper shortage, its basis (the difference between the spot price and futures price in the market) is increasing, indicating the exchanges decreasing copper inventory amid the excessive demand.

COMEX Copper Futures have hiked by 22.85% year-to-date, with the next target pinning to the ten-year high. As of writing time, the futures have reached $4.3615, gaining as large as 120% if calculated by the last March low of 1.9825. In contrast, silver slightly climbed 6% year-to-date and gold declined 5.11%. Although silver has rebounded from the last March low of $11.636 to the current $28 - a rise up to 140%, copper futures have totally outpaced it according to their performance year-to-date. All these signs point to strong copper enduring in the future. Copper is expected to triumph over precious metals for industrial purposes, silver in particular. COMEX Copper Futures are likely to break the high of $4.6255 recorded in 2011 and head towards the psychological mark of $5 in the next stage.