CPER: Buying The Copper ETF On The Correction

Copper is a bellwether industrial commodity. Aside from being the most closely watched metal on the London Metals Exchange, many economists and analysts look to copper as an indicator of global economic growth or contraction. Copper has earned its nickname as Doctor Copper. The metal is not a medical doctor, but many market participants believe it has a Ph.D. in economics as its price is a critical indicator.

During the height of pandemic-related selling in March 2020, COMEX copper futures fell to a low of $2.0595 per pound, the lowest price since 2016 when copper fell to a bottom at $1.9355 per pound. Even at the 2016 low, copper remained a lot higher than over past decades. Before 2005, the red nonferrous metal had not traded above $1.61 per pound since futures began trading in the early 1970s.

Copper futures exploded higher to a new record high in 2021, surpassing the 2011 peak at $4.6495 and rising to a continuous contract high of $4.8985 in May. Since then, copper corrected as bull markets rarely move in a straight line. After probing below the $4 level in August, copper futures have remained above the level as the price is consolidating and digesting the move to record territory a few months ago.