Copper is an integral part of sustainable energy initiatives because of its reliability, efficiency and performance. Its superior electrical and thermal conductivities increase the energy efficiency of countless energy-driven systems that rely on electric motors and transformers. The same physical properties are vital in the collection, storage and distribution of energy from solar, wind and other renewable sources.
Within a decade, the world may face a massive shortfall of what’s arguably the most critical metal for global economies: copper.
Used in everything from wiring and pipes to batteries and motors, copper is both an economic bellwether and a key ingredient in the push toward renewable power and electric vehicles. If producers fail to address the deficit, prices will keep rising and present a challenge to world leaders counting on a worldwide energy transition to fight climate change.
The copper industry needs to spend upwards of $100 billion to close what could be an annual supply deficit of 4.7 million metric tons by 2030 as the clean power and transport sectors take off, according to estimates from CRU Group. The potential shortfall could reach 10 million tons if no mines get built, according to commodities trader Trafigura Group.
People have been investing in gold for thousands of years, but more recently gold has become a favoured investment for many of the world’s central banks and institutional investors who control large amounts of the world’s capital.
Gold is an asset class that typically performs in the opposite direction of other investments such as the equities market and the US dollar. Because of this negative correlation, investors often use gold as a way to diversify risk within their portfolio. This investment strategy can be particularly effective during market crashes or in times of market volatility.
Analysis suggests that gold is still the most effective commodity investment in a portfolio as it continues to stand apart from the commodities complex. It deserves to be seen as a differentiated asset as it has historically benefited from six key characteristics: