Copper Prices Surge to New All-Time Highs

The price of copper has had quite a rally over the past year or so, and it's making new all-time highs this week. What does this have to do with gold and silver prices? Plenty. Let's discuss.

You no doubt recall that gold and silver prices reached all-time highs back in January of this year. After the brutal decline that began with the onset of the Iran War, prices have yet to recover, though the gold price is actually up about 2% year-to-date as I type.

Gold and silver often trade in tandem, though they have different qualities. Gold is mostly a monetary metal with a few, limited industrial uses while silver is mostly an industrial metal with a few, limited monetary uses. Below is a year-to-date chart of gold and silver prices together with gold in candlesticks and silver as a blue line.

Gold and Silver Price Chart

Silver and Copper Prices

As the chart shows, the trading algorithms and human traders mostly treat gold and silver as the same metal, even though their uses are significantly different. In reality, silver has more in common with copper, at present. Both are industrial metals and fabulous conductors of electricity. As such, you might think that silver and copper would have nearly identical charts, but, as you can see below, they do not. For the next chart, the copper price is in candles with silver remaining as a blue line.

Copper And Silver Price Chart

What's interesting is that the copper price is currently making new all-time highs, based upon some extraordinarily strong fundamental factors, as you can see below.

Copper Price Rally and Silver Outlook

The question then becomes....: How much higher can/will copper prices move before silver traders catch on and bid silver higher, too? Or perceived another way, why would anyone expect the silver price to fall back below $50 if the copper price continues to surge?

There are many reasons to expect higher silver prices in the months and years to come. The "electrification" of the global economy as well as industrial demand from the buildout of Artificial Intelligence will lead to increased demand and prices for copper. As a sister metal, these same factors will serve to increase demand and prices for silver, too.

Silver Price and Industrial Demand

After being harshly driven backward from the $50 level in 1980 and 2011, there's a reason why the silver price has remained above $50 for nearly a year now. Gold above $4000/ounce and copper above $6/pound are the new normal. Silver above $50/ounce is the new normal, too.

As such, investors should not wait for a deep pullback before adding to their stacks of physical silver. The supply and demand fundamentals are too strong for any sustained and prolonged dip in price. Copper is leading the way. Expect silver to follow.

Gold and silver investors can track the latest precious metals prices and market developments through Sprott Money.