Precious metals have shone through the gloom as market clouds gather amid global trade tensions. But investors joining the hunt for havens would do well to understand the fundamental trading differences between the leading lights of this flight to safety—gold and copper.
The two metals have been on a tear since the start of 2026, hitting fresh record highs in January. But they each respond to distinct financial cues, making their shared rally less coincidence than warning that the market is sending mixed signals about inflation, growth, and financial stability.
What Makes Gold Shine
Unlike copper, the physical demand and supply for gold aren’t its key price drivers. Instead, investment demand —in the form of gold bars, coins, and ETFs—play a much bigger role.
According to the World Gold Council, investment accounted for 41% of final demand for the yellow metal in the third quarter of 2025. Jewelry came in second, at 28%.
And while gold does have several industrial applications (such as in circuit boards), they account for just 6% of final demand. The opposite is true for copper, for which industrial applications make up almost 100% of its end use.
Copper as a Bellwether
More than two thirds of copper’s annual supply is used in construction—in plumbing and wiring—and manufacturing equipment-used in energy transmission cables, electric motors, and micro chips.
More recently, the buildout of artificial-intelligence data centers has amounted to 7% of global demand (or 1.7 million tons). Its widespread use in manufacturing has prompted some traders to view copper as a bellwether for global economic activity.
In reality, copper’s price is best understood as a proxy for Chinese economic activity, given the country’s longstanding industrial expansion. China remains by far the world’s largest consumer of copper—at roughly 60% last year.
Diverging Fortunes?
The factors underpinning gold’s historic performance look set to persist. Earlier this month, analysts at Citigroup recently estimated that gold could reach $5,000 an ounce within three months.
That watermark has come faster than many anticipated. Continuous gold futures were trading at $5,089 in early trading Monday, having already climbed 17.5% since the start of January.
For copper, underlying price drivers may be moving in the other direction. Goldman Sachs released a note in January stating it sees the LME copper price falling to$11,000 a ton by December 2026.
For now, copper futures are hovering at around $13,115 a ton.
Goldman noted that China’s copper demand came in below expectations in the fourth quarter of 2025. In addition, high prices could also incentivize switching from copper to aluminum in the manufacture of various goods, including EV batteries.
Meanwhile, President Donald Trump’s threat to impose tariffs on imports from several European countries unless the U.S. can acquire Greenland stoked worries that a resulting trade war could weigh on global growth—and consequently copper demand. Trump has since backtracked but fears remain.
Just remember, if you’re in the market to diversify your portfolio into metals, make sure you know why you’re buying—gold for resilience, copper for long-term growth. Whatever your motivation, the discipline to hold for the cycle ahead will be key as markets continue to be buffeted by geopolitical uncertainty.
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