Gold gets criticized for being an inert metal. Warren Buffett doesn’t like it even though his father was a “gold bug.”
“Gold pays no dividends,” Buffett says. It has no cash flows. It offers no opinions about the economy.
Copper tells a different story. Those in the know in financial circles call it “doctor” copper – and bestow the base metal with an honorary degree in economics.
Why? Because copper is a critical component in wiring and piping. When the economy is growing, new construction and new technologies increase demand for the metal, raising its price. A falling price signals weaker demand, a weaker economy.
Copper hit a new all-time high yesterday. The good doctor is telling us the global economy is expanding:
Copper prices have now set a new all-time high. (Source: Barchart)
A boom in data center building has given copper a shot in the arm.
We belabored the point in our Grey Swan Trading session yesterday. Gold is out in the waiting room, embroiled in an argument over the global money system.
Governments across the planet believe they can keep loading up debt and printing money with no consequences. M2 (cash in the system) is at a historic, crisis-level, high and rising. The gold price is sitting in the corner, now, pouting at $4,320.
Meanwhile, copper is hard at work. The metal stopped caring about the world’s money glut after the U.S. Mint replaced the penny with a zinc alloy in 1982 and discontinued new pennies last year.
The copper price is no doubt benefiting from inflation driven by money printing. But the doc don’t lie. Copper’s new all-time highs, while gold and silver still languish, are a sign the AI growth story is also that of the global economy itself.
