Rebel Capitalist: Copper and Gold Are Both Signaling This…
Gold prices continue to trend higher. The metal recently topped $2,500 for the first time ever. The metal is having a strong year. But gold prices can also reflect some of the health of the underlying economy.
Gold’s move higher suggests that investors remain concerned about inflation. Gold tends to hold its own against inflation over time. It tends to fare best when inflation unexpectedly pops higher.
Meanwhile, other commodities continue to perk up. That could be a sign of a longer-term bull market in the commodity sector. Such a bull market will take years to play out, but could be highly rewarding.
Besides gold, copper is showing some signs of long-term strength. The metal has been in high demand. However, China has recently pulled back on its massive copper buys. That’s created a big price drop.
Despite a small selloff in July, along with the selloff in markets, copper is on track to trend higher.
More importantly, the ratio of copper prices relative to gold indicate a stronger value here.
Investors interested in the metal can wait for the price of copper to stop declining. Copper is a widely-traded commodity. But copper mining stocks may offer investors better valuations. And copper mining stocks can also provide the income of dividend payments.