There has been a lot of focus on gold lately as prices continue to hit record highs into 2024.
But gold is not the only commodity to increase in price. Due to events impacting global and domestic supply and demand, a handful of other metals are also rising in value and challenging all-time highs.
These metals – like silver, copper and aluminum – are flying under the radar as they experience price surges that could lead investors to look at opportunities beyond gold.
Why are copper prices rising?
Demand for copper in China and the US is increasing, and as the main driver is the green energy transition, this appears to be a sustainable long-term trend. Beyond its many industrial applications, copper is a key component in solar panels, wind turbines, electric vehicle charging cables, and electric vehicle charging stations.
According to Kelley Blue Book, 2023 saw record sales of 1.189 million electric vehicles, making electric vehicles the fastest-growing auto category in terms of sales. Additionally, data from the US Energy Information Administration shows that renewable electricity generation capacity surpassed that of both coal and nuclear last year and is expected to approach natural gas capacity by 2025.
This and continued demand for industrial uses such as plumbing, electrical networks and appliances have driven up copper prices. The ductile metal is approaching its all-time high in 2022 and is up 18.42% since hitting a six-month low in October 2023.
As a result, copper-backed stocks are rising in tandem. Numerous metal-leveraged exchange-traded funds (ETFs), such as the Global .
Silver no longer takes a backseat to gold
Although gold reached its all-time high in April, the yellow metal has been outpaced by silver by 9.76% to 15.10% over the past month. Silver remains nearly 40% below its all-time high, but is currently trading at its highest prices since the first quarter of 2013.
Demand for the metal continues to outstrip supply, as silver and its alloys are integral to the production of batteries, LED chips, medicines, nuclear reactors, solar panels, semiconductors and touchscreens. According to the Silver Institute, demand is expected to reach 1.2 billion ounces this year, which would mark the second highest level on record.
Like gold, silver is seen as a safe haven asset that performs well during times of geopolitical turmoil. With tensions escalating in the Middle East and no end in sight to the war between Ukraine and Russia, the price of silver – which has risen 31.22% since Hamas attacked Israel last October – should remain high.
As a result, silver-backed ETFs are on the rise. The iShares Silver Trust (SLV), for example, has seen a gain of 21.87% in 2024.
New sanctions against Russia push up aluminum prices
Aluminum futures recently traded at their highest levels since June 2022 in the wake of new US and UK economic sanctions against Russia, the world’s third-largest producer of the metal. With global supply tightening, the price of aluminum is currently trading well above its one-year high.
While it is unlikely to challenge its all-time high set in March 2022, aluminum is up 11.88% over the past month and will likely continue to rise as demand for the lightweight, durable and weather-resistant metal increases. corrosion. According to the World Economic Forum, demand is expected to increase by nearly 40% by 2030 as “the transportation, construction, packaging and electricity sectors will drive demand and account for 75% of total metal demand ”.
The rise in aluminum stocks is similar to that of copper and silver, with major companies such as Century Aluminum (CENX), Kaiser Aluminum (KALU) and Alcoa (AA) up 48.91%, 26, respectively. 36% and 9.79% this year.
Other metals in tow: how to invest safely
Copper, silver and aluminum are not the only metals that will outperform gold in 2024. Tin prices are supported by outbreaks of violence in key mining areas in the Democratic Republic of Congo and Rwanda. Flexible metal prices have increased by 15.28% over the past month.
Zinc also joins the rally. China – the world’s largest consumer of zinc – recently saw its production activity expand at the fastest pace in over a year, with similar trends developing in the United States and Germany. As a result, zinc prices have increased by 9.68% over the past month.
Although base and precious metal prices have been rising lately, short-term trends should not dictate your investment strategies. For example, the aforementioned aluminum producer, Alcoa, saw its stock hit an all-time high in the first quarter of 2022 due to ongoing supply chain issues. But investors who waited for the rally to invest saw their stocks fall sharply over the next six months, with prices falling by around 63%.
A safer approach to diversifying a portfolio with metal exposure would be to choose a metal-focused ETF that is not driven exclusively by short-term factors. ETFs provide broad sector exposure by allocating funds across a basket of stocks, and this approach can be supported by choosing a metal-focused ETF with long-term benefits.
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