Is copper and aluminum looking to break out?

Gold has surged toward record levels this year, while both copper and aluminum remain relatively low. This is an unusual gap, especially considering that the dollar has weakened significantly and production costs for base metals have increased. Despite this, many stable copper and aluminum producers are priced as if demand were disappearing—which it hasn’t.

Right now, I see greater potential in copper and aluminum, both in absolute terms and relative to gold. It’s not just about price levels, but also about how the supply looks today—and how few new volumes are actually being added to the market. Projects take time, investments have slowed, and yet demand remains at reasonable levels.

For my part, I see these types of assets as a good complement to my gold holdings—a sort of hedge in case the economy, and especially the stock market, experiences a temporary recovery. In that scenario, base metals tend to get a boost upward, while gold may rather stagnate or decline somewhat.

It’s mainly about taking advantage of an unusual price spread. Stable production, low debt, and undervalued balance sheets make certain companies within copper and aluminum really interesting right now. It’s in situations like these that I slowly start buying into interesting producers.