Commentary: Despite price rise, copper at historic low against gold – by Chris Hinde and Katja Freitag (Northern Miner – October 13, 2020)

Global mining news

According to the popular adage, copper has a doctorate in economics, with an ability to predict turning points in the global economy. This proverb stems from the metal’s use in widespread applications, from power generation and electricity distribution to iPhones.

Since the end of March, the price of the base metal has recovered remarkably well, rising from barely US$4,900 per tonne to over US$6,600 per tonne by the end of September. Dr. Copper is looking to next year, and the price rise of 35% in the second and third quarters suggests that a global economic recovery is upon us.

The price of gold benefits from the exact opposite, namely political and economic turmoil. We have had that in spades since March, so the precious metal has also performed well in the six months to end-September, rising 18% to US$1,900 per ounce.

Gold and copper might appear unlikely bedfellows. The base metal is 15,000 times more abundant in the Earth’s crust than the precious metal (60 parts per million [ppm] compared with gold’s 0.004 ppm), and copper is renowned for its wide range of practical uses in modern economies, while the other is usually hidden away.

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