Copper bus manufacturerTo explain to you the prospects of copper and whether the future production demand for copper can rank among the most demanded metal materials and retain the crown, please see the detailed information organized by the editor below:

Copper is usually regarded as an indicator of whether the economy is healthy. Historically, when overall manufacturing and construction activities shrink, copper prices fall; when overall manufacturing and construction activities are in a period of expansion, copper prices rise.

Currently, copper prices are above $3 per pound, and "Copper Doctor" has risen nearly 28% this year, far exceeding the five-year average from 2012 to 2016.

Arnoud Balhuizen, the commercial officer of Australian mining giant BHP, said in a media interview last month that copper is the "metal king of the future."

"2017 was a year of innovation for the electric vehicle market, and copper will be the metal of the future," Balhuizen said. He added that compared to regular cars, electric vehicles require four times as much copper, and considering the surge in global demand for battery electric vehicles (BEVs), the market currently greatly underestimates copper's potential.

In June this year, a report jointly completed by the International Copper Association (ICA) and the market research firm IDTechEx showed that over the next 10 years, the rapid development of electric vehicles will drive demand for copper.

Frank Gonzalez, an advanced technology analyst at IDTechEx, believes that in the next 10 years, with technological development, the demand for electric vehicles will increase significantly. As the prices of electric vehicles and fuel vehicles become similar, more electric vehicles will enter the market. The copper used for electric cars and dams will increase from 185,000 tons in 2017 to 1.74 million tons in 2027, a ninefold increase. In addition, each electric vehicle charger will add 0.7 kilograms of copper consumption, and if fast charging is required, copper usage will increase to 8 kilograms.

The time for cobalt to shine has come

The development of electric vehicles is also inseparable from cobalt. Cobalt is a silvery-gray, lustrous metal, mainly used as a primary material for producing electric vehicle batteries, and this metal can extend the expected lifespan of batteries. Since 2017, cobalt prices have risen by more than 81%, and in the past 12 months, they have increased by 109%. The rise in cobalt prices is driven not only by the growing demand for BEVs but also by interruptions in cobalt supply within the Congo—Congo, as a major global producer of cobalt, accounts for more than 60% of the world's cobalt mining output.

Macquarie research analyst Vivienne Lloyd said, "The future of cobalt is very promising, and it seems far from over." ”

Before this, cobalt was not the focus of mainstream investment, but as countries increasingly advocate reducing the use of fossil fuels, cutting vehicle exhaust emissions, and vigorously developing new energy vehicles, the status of cobalt has changed rapidly. According to Zhitong Finance, the London Metal Exchange (LME) is about to launch two cobalt contracts: one is a metallic cobalt contract, and the other is a cobalt sulphate compound contract. Balhuizen stated that this will enable investors to participate in cobalt trading.

In addition, investors can also invest in producers that own cobalt resources, such as Glencore (00805), Freeport-McMoRan Copper & Gold (NYSE: FCX), and Norilsk Nickel (OTCPK: NILSY).

Gold is expected to rise above $1300/oz

Some reports and analysts last week believed that gold looks quite good as we enter the fourth quarter and beyond.

UBS strategist Joni Teves believes that gold has already rebounded from its 2016 low this year, and this trend is 'encouraging.' Although a potential rate hike in December could be negative for gold, Teves points out that in the months following the previous three rate hikes, gold performed well, and this time should be no exception. In addition, since 2014, gold has risen every January, so the upcoming January 2018 may also see a similar increase.

Gold prices not only remain above the 50-day moving average again, but also showed a strong upward trend throughout 2017 as the US dollar further declined.

Of course, a weak dollar is bullish for all commodities, including copper. Bloomberg strategist Mike McGlone stated that by the end of this year, commodity prices might still rise by another 20%, unless the dollar unexpectedly strengthens in the short term.

Independent investment research firm BCA wrote that the main risks in 2018—including U.S. President Trump's protectionism and ongoing conflicts in the Middle East—could put pressure on gold prices.

The research institution reminds investors that, based on historical experience, during periods of economic and geopolitical tension, gold, as a safe-haven asset, generally performs well, with returns outperforming the S&P 500 index, the US dollar, and 10-year US Treasury bonds. Gold has a negative correlation with other assets, and its value-preserving function is highlighted when the stock market enters a bear market.

BCA analysts estimate that a bear market triggered by the US tightening its monetary policy could arrive as early as 2019. At that time, gold will stand out among various asset classes, especially if inflation pressures push real Treasury yields into negative territory.

Insights from Germany

Before 2008, Germans invested almost nothing in physical gold, with an average annual demand of only 17 tons. German gold-backed exchange-traded commodities (ETCs) did not appear until 2007.

But then the financial crisis broke out, followed by monetary easing and negative interest rates implemented in various countries. These events ultimately prompted many Germans to seek more reliable ways to store value.

A new report from the World Gold Council (WGC) shows that in 2016, German investors became the world's largest gold buyers, with Germans investing as much as $8 billion in gold coins, gold bars, and gold ETCs, even surpassing investors from India, China, and the United States.

WGC analysts believe that there is still room for further growth in German investors' demand for gold. A recent survey shows that potential demand in Germany remains strong, with 59% of German respondents believing that 'gold will never lose its value in the long term.' This large proportion indicates that investing in gold remains attractive.

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