Copper price soars 9%, gold continues to rise. Who benefits from the rally?

The metals market is experiencing a powerful rally: following gold, copper is also hitting all-time highs, with its price rising by more than 9% over the day. The jump in quotations supported the shares of major mining companies and strengthened the effect of "overheating" in commodity markets.

The rally in the metals market has not only affected gold - copper is also rapidly updating historic highs. Three-month copper futures on the London Metal Exchange, one of the world's key benchmarks, jumped more than 9% on Thursday to a record $14,268 per ton. U.S. copper futures also rose more than 9%.

The sharp rise in prices supported shares of mining companies, notes The Wall Street Journal. Copper, widely used in energy and construction, is considered one of the key metals of the energy transition. At the same time, exchange inventories remain high, especially in the United States.

Shares of Antofagasta, a copper producer in Chile, rose nearly 11%, while BHP, the world's largest diversified mining group, added 4.2% and Glencore, a global commodities trader and metals producer, gained 4.7%. Among U.S.-traded companies, Freeport-McMoRan, one of the world's largest copper producers, rose 5.5%, while Southern Copper, a leading player with assets in Peru and Mexico, gained nearly 8%.

Meanwhile, gold continued its record rally on Thursday and appeared on track for its best monthly performance since 1973. The metal's spot price was up 1.9% at the moment, to $5516.31 an ounce, after earlier rising to $5594.82. Since the beginning of the month, gold has risen by more than 28%.

Commenting on the rise in copper prices, Neil Welsh of Britannia Global Markets said that the sharp jump was not due to physical demand from the industry, but active speculative buying by financial investors in China, writes Reuters.

This is about the so-called bulls - traders who bet on further price growth and aggressively build up long positions in futures and derivatives. The scale of these purchases was so significant that in one day they triggered the biggest price rally in years, temporarily disconnecting the market from supply and demand fundamentals, Reuters notes.

As for gold, JPMorgan strategist Nicholas Panigirtzoglu believes that gold could rise to $8000-8500 per ounce if the share of this metal in private investors' portfolios grows from the current 3% to 4.6%, MarketWatch writes. According to his assessment, such a scenario is possible if investors continue to replace long bonds with gold amid concerns about inflation and currency depreciation. These risks, in the analyst's opinion, now look more significant than the threat of classical recession, from which bonds are traditionally protected.

This article was AI-translated and verified by a human editor