Data centers and tariff rumors are fueling a copper boom
The Nymex gold price has returned 17% so far in 2026. Export bans on copper from places like DRC have helped.
When hostilities kicked off in the Middle East earlier this year, the gold price corrected 20% while copper's held steady. Since then, copper has set fresh records. Why?
Panmure Liberum's commodity team, led by analyst Tom Price, reckon it's because investors have decided copper (HG00) is a better investment option. It offers similar inflation protection (witness its long-standing correlation with gold (GC00)) but can also offer what gold lacks: an industrial-backed demand growth story. Moreover, copper's price action suggests that, unusually for a no-yield commodity, it's largely indifferent to U.S. interest rates.
Relative price performance: copper vs. gold
Price, in conjunction with fellow analysts Duncan Hay and Ashley Kielty, set out his case for copper in a report published Tuesday with the punchy title, "Copper.... Better than gold." The predominant theme explaining copper's popularity is its new end-uses in the build-out of data centers as well as for electrification and decarbonization.
He cited three other key drivers behind the metal's recent price appreciation: first U.S, investors accumulating copper in anticipation of another U.S. import tariff that has been widely rumored; second, the hopes of some kind of cease-fire agreement between the U.S. and Iran that would foster better global economic growth; third, an export ban by the Democratic Republic of the Congo which produces around 14% of the worldwide total.
The net effect of these coinciding factors has been to push copper contracts on the London Mercantile Exchange up 14% year-to-date, to $14,277 per metric ton, the rough equivalent of $6.45 per pound in the U.S. The Comex one-month futures contract trades at a premium to that at $6.75/lb, notes Price while the Shanghai Futures Exchange is higher still at $16,110/t or $7.30/lb.
Trying to understand better the forces propelling copper higher, Price and his team scrutinized data from the Commodity Futures Trading Commission which categorizes players in the copper market by whether they are "commercial," taking physical delivery or "non-commercial," tending to imply financial investors or speculators.
Sifting back through the data to 2021, Price found changes in net positioning explains 85% of copper's price move, so it can be observed that speculative flows have become the dominant price catalyst. Tracking this CFTC data is probably the best guide to trading copper at present, Price argues.
One other factor leading to higher prices is the continued disruption to mine supply. In 2026 there have been multiple hits to production worldwide and to accommodate for this, Price adjusts his global mine supply forecast by 3.5% every year. This "disruption allowance" effectively removes 800,000 metric tons of copper from his global mine supply forecast.
Price's preferred play among copper stocks is Glencore (UK:GLEN) while he maintains holds on the likes on Antofagasta (UK:ANTO), Anglo American (UK:AAL), Rio Tinto (UK:RIO) and BHP $(BHP)$ .
Copper's price holds high.
The strength in copper has run ahead of Price's price forecast, which stands at $9600/t or $4.69/lb in the U.S. Over the longer-term Price expects a return to "a fundamentally-backed price."
In Tuesday morning continuous trading, the Nymex copper contract was trading at $6.66/lb, up 0.66%
-Jules Rimmer
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