Copper has emerged as a standout performer in 2026, outpacing gold as demand surges across key industries. The metal, crucial for electronics, construction, and transportation, has climbed 15.8% year-to-date and over 30% in the past 12 months. In contrast, gold futures have dropped 4.11% year-to-date and 4.52% over the same period, with spot gold down 4.89% over 12 months.
Ivanhoe Electric CEO Taylor Melvin highlighted the strategic importance of copper, citing growing demand from artificial intelligence, power-grid investments, and defense spending. Speaking to CNBC's 'Squawk Box Europe,' Melvin noted that securing reliable copper supplies has become a priority for governments and industries, supporting its price rally.
Despite recent volatility in tech stocks amid questions about AI spending, Melvin believes copper demand will remain resilient. He described the tech sector's need for copper as 'inelastic,' suggesting that major tech companies will not scale back investments in hyperscale data centers based on copper costs. Similarly, national defense budgets are driving additional demand.
The potential for U.S. tariffs on refined copper has also influenced the market. The Commerce Department recommended a 15% tariff starting January 1, 2027, though no final decision has been announced. Iain Pyle, senior investment director at Aberdeen Investments, noted that uncertainty over tariffs has led to increased copper stockpiles in the U.S., while Chinese inventories remain low. Pyle described copper as the 'clearest example' of a market where supply struggles to meet demand, predicting sustained higher prices.