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If someone said that a certain precious metal doubled in value between May 2020 and May 2021, you’d likely think that now is the time to jump on board. Interestingly enough, this actually happened with copper. In fact, anyone investing in copper has seen the price on the rise since the turn of the new millennium.
While this may make purchasing the metal seem like a great long-term investment strategy, there are many things under the surface to consider. And when you take each of these factors into account, you’ll discover that investing in silver is probably a far better option.
At Silver Gold Bull, we want to make sure every purchase decision you make is an informed one. The following guide will help you do that if you’re considering investing in copper, and if you’re still interested after reading, there are a variety of purchase options available to you.
Reasons People Consider Investing in Copper
Buying copper bullion is far from a new trend. It’s one of the first metals the human species ever used, and recognition of its value has lasted throughout the ages. Because of its many positive attributes, its uses range from industrial and electrical to construction and even monetary.
While the facts seem to dictate that silver is a better investment than copper, the people purchasing the latter aren’t incorrect in thinking they can make a profit. There are actually a variety of legitimate factors that make investing in copper seem like a brilliant move.
This list is far from exhaustive, but it will give you an idea of why copper investing is so appealing to many people.
The Barrier to Entry Is Nearly Nonexistent
If you want to buy gold bullion bars, a single ounce can cost an entire week’s pay for many people. A copper bar of the same weight will often set you back less than the cost of a meal at McDonald’s. This means investing in copper is open to literally anyone. There are almost zero hurdles.
The Price of Copper Saw Significant Growth
Until the turn of the new millennium, you could get a pound of copper for less than $1. This reality quickly changed, however, as the metal climbed to more than $4.60 in May 2021. While a profit of less than $4 might not seem impressive, this is a return of over 650%.
Demand for Copper Remains High
Experts expect the demand for copper to jump by at least 50% within the next 20 years. Increased adoption of renewable energy sources, higher consumer electronic sales, and expanded ownership of electric vehicles (EV) will probably drive this growth in the coming years.
Analysts Forecast Dwindling Copper Supplies
A hedge fund director recently called copper “the new oil.” Demand for this metal remains high even as global supplies have dwindled. Analysts believe there’s a genuine risk of a global copper shortage, and availability of the metal may one day rely solely on scrap supplies.
Why Silver Is a Better Investment Than Copper
All these benefits of investing in copper sound amazing, right? Unfortunately, these global realities don’t really touch on the finer points of bullion investing. Once you finish this section, you’ll likely understand why silver vs. copper investing isn’t much of a contest.
Barriers to Investing in Silver Are Also Minimal
One of the biggest attractions for those interested in copper investing is the low price. When you look at the cost of silver, though, entry barriers don’t really increase. Silver’s per-ounce price is manageable for most investors, but you can also buy fractional silver to reduce overall costs.
Storage for Investing in Copper Is Ridiculous!
Even if the price of copper continues to rise, the biggest issue most people encounter is storage. An ounce of silver and an ounce of copper take up relatively the same amount of space, but the value of these two metals is drastically different.
This means any investment you make in copper will require a significantly higher amount of space to store than silver. While it may have the nickname “The Eternal Metal,” you certainly don’t want to get stuck paying precious metal storage fees on this non-precious metal for eternity.
Silver Can Hedge Against Poor Economies
When you’re investing in copper, the hope is that the price will continue to rise. Since the metal gets mostly used in industry and construction, a thriving economy typically means great things for this bullion. If manufacturing and home building suddenly slow, though, demand may follow suit.
Silver also stands out as an industrial metal that can thrive during economic expansion. Since people have frequently used it as a hedge against inflation throughout history, though, its value can also rise during poor economies. We saw this play out during the multiple recessions of the 1970s.
Important Questions for Copper Investing
It’s hard to justify investing in copper when the benefits of buying silver are so numerous. If you’re still on the fence, though, you likely have a few questions that need answers. The following are the most common concerns for copper investing, so they’ll likely help you on your journey.
How can I buy copper for investment?
There are a variety of ways that you can buy copper for investment. Many people use online auction sites, since everything from collectable coins to scrap metal are available. Unfortunately, you’re never really sure what you’re getting on those platforms.
One popular method of investing in copper is purchasing U.S. pennies created before 1982 in bulk. While modern pennies are mostly zinc, the coins contained 95% copper prior to 1982. Unfortunately, these are a very bulky item to own.
Investors are better off purchasing bullion coins and bars from reputable dealers. Even though these may be easier to store and contain a higher percentage of the metal, you’re still going to run into the problems we’ve discussed.
Are there copper investment funds?
To avoid storage issues when investing in copper, many people buy into exchange-traded funds (ETFs) that track the metal. This allows investors to gain exposure to copper without having to take physical ownership. There are several reputable ETFs available to invest in:
- United States Copper Index Fund
- iPath Bloomberg Copper Subindex Total Return
- iPath Pure Beta Copper
- Global X Copper Miners
The problem with investing in copper this way is the same experienced by those who choose “paper” options over buying silver bullion bars. You never really have ownership of the metals in the fund, and a variety of factors outside of spot price can affect the overall value.
Are there copper investment stocks?
- There are also a variety of stocks you could purchase for copper investing to avoid taking physical ownership of the metal. Most of the best options are mining, natural resources, and mineral exploration firms.
Just like when investing in copper ETFs, though, you might experience losses even as the value of the metal rises. Owning physical bullion is the only way to ensure your investment remains true to global prices.
Will copper prices go up?
The most asked question regarding copper investing is whether the metal’s price will go up. There’s no way to predict this, but all signs point toward increases in value. Experts frequently say the same about silver, however, and with that investment, you avoid many of copper’s disadvantages.
Is It Worth Investing in Copper Bullion?
Even though it’s not considered a precious metal, copper holds value as an investment. With any investment, though, it’s important to look at the big picture. While the price of copper has certainly had impressive returns, the disadvantages of ownership are too numerous for most people.
Those who benefit the most from copper investments aren’t traditional precious metals investors. Even at its remarkable $4.68 per pound in May 2021, you’d need more than 100 pounds of the commodity to even break the $500 mark. And what about that same 100 pounds in silver?
In May 2021, it would’ve been worth $42,000. Investing in copper may sound great, but it’s prohibitive for most people. At Silver Gold Bull, we want you to make wise investment decisions. Visit our Silver Bullion Page today, and you’ll see that the white metal is far better for investors.
