Forget the gold price, copper was most profitable covid-19 trade

We needed a hero and we got one. Image of Captain Copper, superhero created to teach kids about the metal, courtesy of Chile state miner Codelco

The gold price is approaching all-time highs above $1,900 an ounce. 

Investors are showering gold ETFs with money, which, if ever redeemed for physical bullion, would suck up the output of all the world’s gold mines for more than a year.

The copper price? It’s hardly moved from its 2020 opening levels. The bellwether metal looks likely to be rebuffed by the mythical $3 per pound level (last averaged in 2014) for the foreseeable future. 

As for copper ETFs – more money flowed into GLD since you started reading this post than the total assets the world’s only two copper ETFs have under management.

Forget the gold price, copper was the most profitable covid-19 trade

However, if during the depths of covid-19 panic you kept your wits about you while all others were losing theirs, your returns are squishing gold bugs.

Since copper ETFs are not really a viable option (not liquid at any temperature) and futures may be better left to managed money, copper stocks have to do it for you. 

And they sure did.

If you picked up specialists Freeport (NYSE:FCX), Southern Copper (NYSE:SCCO) and First Quantum (TSE:FM) four months ago, you’re enjoying plus-60 returns. 

FCX, which regularly features on the most active trading lists, nearly doubled from mid-March (undoubtedly enjoying an an extra boost from its Papua gold business).

Lumbering diversifieds Anglo American (OTCMKTS: NGLOY) and Vale (NYSE:VALE) beat gold’s no. 1 and 2 and even thorny Glencore (OTCMKTS: GLNCY) matched big gold’s performance.

Granted; it’s 2020 and this is hindsight. But eventually gold fever – and covid-19 – will break.  

Copper was trading at $2.88 a pound on Friday – the price would need to gain another 58% to hit its 2011 all-time record (for gold it’s probably Monday). 

That gives you plenty of time to play the copper market. 

For the bullion boys, the new all-time high party is almost over.