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Metals gold and copper proving to be very reliable barometers of economic stability
Forget oil. If you want to know how the world economy is faring, just look at two metals: gold and copper. They are usually discovered and mined in the same places, but the yellow and rusty red metals are going in opposite directions price-wise despite an overall slump in commodities — especially this year.
The price of copper — critical in manufacturing and construction — has fallen 10 per cent in 2015 as global growth stalls, while ‘safe haven’ gold has enjoyed a double-digit bounce this month as market and geopolitical volatility continues.
“Just when everyone gave up on gold, turns out the obituaries were premature,” says gold bug John Ing, president of Maison Placements Canada.
In fact gold has amazingly emerged as the top performer of 2015, not just among metals but also compared to stock markets and currencies, he notes. That is largely due to bullion’s traditional role as a fear magnet which investors tend to latch onto when everything else is rocky – and it is lately, from the tanking oil price to topsy-turvy stock markets.