Is Copper Considered a Precious Metal?

Precious metals are those that are rare and occur naturally. Commonly, gold, silver, and platinum are considered precious metals and are often used in jewelry or as currency. They are all considered to be good investments and a hedge against inflation.

Copper, on the other hand, is not a precious metal, as the ones mentioned above. However, this red metal also plays an important role in the world and may even stand beside other metals with great potential. Keep reading to find out in what way copper may gain its value in the future!

Is Copper a Precious Metal?

The short answer is no. At the moment, copper is not considered a precious metal and doesn’t offer the same value as gold or silver. However, the red metal has been quite handy thanks to its characteristics.

Copper is one of the most used metals to be used in the construction and electric industry. Although it may not look appealing on your hand as a ring, it’s a conductor of electricity, which many people would give up their jewelry for.

Copper has been mined for thousands of years, but its abundance is shrinking. It would be hard to maintain ships and plumbing equipment without a corrosion-resistant material like copper.

Is Copper Valuable Enough to Invest in It?

This question has no right answer since gold and silver are obviously more valuable at the moment. At the same time, copper shouldn’t be underestimated. Copper is indispensable in construction, shipbuilding, plumbing, and many other industries. However, the supply of copper is slowly decreasing, making it more and more valuable over time.

Although copper doesn’t fit the criterion of precious metals, the demand for copper is expected to increase. Urbanization and population growth are just some of the causes of increased copper use all over the world.

Advantages of Investing in Copper Bullion

Even though copper is now in abundance, copper bullion can also be a good hedge against inflation, among other things. Here are some of the few factors to consider when investing in copper in the near future:

Store of Value

Copper bullion can be a reliable store of value since it has been in demand in many industries. You can store it as physical value, and inflation will not affect it as much as it can affect paper currency.

Investing in copper can also diversify your portfolio, and you can sell or trade it as a physical asset.

Potential for Capital Gains

The demand for copper is growing while the supply is shrinking. Hence, there is a good potential for capital gains since the price of copper may rise. The price of copper does not fluctuate in the same way as the value of stocks or bonds. This means you have a chance to purchase copper bullion for an attractive price and sell it at the peak of its potential.

High Liquidity

Copper is readily available, so it’s pretty effortless to purchase or sell it. Therefore, investors benefit from high flexibility, even when the market changes. Since the supply of copper is big, it may not be as valuable as precious metals, but it can offer other advantages to investors.

Disadvantages of Investing in Copper

Although copper seems like one of the safest investments, it isn’t without flaws. Copper prices are highly affected by supply and demand and global economic conditions. Due to high demand, more copper mines are being built to extract more metal, and with an abundance of copper comes lower prices.

The same applies to changes in economic conditions that can significantly reduce the value of copper. Certain policies and tariffs sanctioned on the copper market may affect the demand for the metal.

Another factor to consider is that copper recycling is an innovation that aims to meet some percentage of copper demand. In fact, in the last decade, recycled copper satisfied 30% of the global demand.

Frequently Asked Questions

How is copper extracted?

The extraction of copper has changed over the years and is now divided into a few steps. 90% of copper is extracted through open-pit mining techniques. When extracted, copper is first crushed into fine sand, and then undergoes froth flotation, meaning the sand is mixed with water and chemicals. This step ensures the metal is water-repellent.

To extract copper minerals, air is passed through the mixture. It allows minerals to attach to the bubbles and rise to the surface. The mixture is then thickened and smelted into purer copper slabs.

What countries are the biggest producers of copper?

Some of the biggest producers of copper are Chile, Peru, China, the United States, and Australia. Collectively, they contribute to about 75% of the world’s copper production, with Chile being the largest producer of all.

Will copper become rare?

Judging from how much copper is produced and used across the world, there may be a copper deficit. The automotive and energy transition industries are the ones where copper is in high demand. The forecast of total copper demand may rise from 1.8 million tonnes to 3+ million tonnes by 2025.

As of 2020, global copper reserves are estimated at 870 million tonnes, while the annual demand for copper is 28 million tonnes. The resources of copper are estimated at 5,000 million tonnes. Hence, whether copper will ever become scarce is still an open question.

Article Sources

At Gold IRA Blueprint, we dive deep into the world of gold IRAs, using trusted sources to back up our insights. Our sources range from official documents to expert interviews, ensuring our content is both accurate and reliable. We also draw on research from reputable publishers to give you the most comprehensive understanding possible. Check out our editorial policy to see how we maintain our high standards for accuracy and fairness. Also make sure to check out our Financial Review Process to have a better understanding of our process.

Copper Demand and Long-Term Availability. Copperalliance.org/. Accessed07/21/2023

There isn’t enough copper in the world — and the shortage could last till 2030. Cnbc.com. Accessed07/21/2023

Is Copper Bullion a Good Investment? Worldfinancialreview.com. Accessed07/21/2023