How copper is doing is often a good indicator for how the economy is doing. Copper demand is linked to construction ,transportation and consumer electronics. If consumers are confident about how the economy is going, construction tends to be strong and people spend more on discretionary items. If people are worried about the economy then spending slows and demand drops.
The copper price hikes don't necessarily signify rampant speculation that is bound to end with a crash. The price of copper generally represents a pretty accurate barometer of the demand for it in the real world, rather than an irrational bet on its future value.Copper is a cheap, plentiful metal with lots of useful properties: It resists corrosion and is an excellent conductor of heat. As a result, it can be found in the intestines of a good chunk of the world's industrial economy. Plumbing, radiators, electrical wiring, and air conditioners all require copper. And copper has been benefiting from some pretty significant trends. First, there's the global housing and construction boom.And it's a great coincident indicator. As copper's fortunes go, so goes the world economy.
That is an interesting theory. I never thought about checking and comparing the two but it does make sense.
If the construction sector expands, the demand for copper also will rise and this way the price will rise too.
