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Copper is essential in the modern economy. Electronics, automobiles, and utilities among other things can’t function without it. Optimism surrounding the President’s $1 trillion dollar infrastructure spending proposal and his efforts to support U.S. manufacturing is driving copper prices higher.
Donald Trump’s pro-business plans are very bullish for copper. This rally may just be getting started and savvy investors are taking notice.
Precious metals investors – and dealers – tend to overlook copper. We think that’s a mistake; Money Metals is actually stocking up on copper pennies and rounds to meet the demands of our savvy customers.
If the first thing that comes to mind when you think of copper is wiring and ancient currency, you're right. But did you know that there is also a market for trading copper bullion just as there is for precious metals?
What is bullion? Bullion is a category of items which contains metal in coin, round or bar form which is valued primarily based upon its metal content rather than for rarity or numismatic characteristics. The most common bullion items contain conventional precious metals; gold, silver, platinum and palladium. Bullion is often thought of as bars but many of the products traded come in round or coin form.
A rather new addition to this trading market is the copper bullion. The unit value of copper is far below that of precious metals, but that doesn't mean it can't result in big paydays for investors. Copper is one of the most useful metals in industry and it has a long history serving as money in coinage. Its value is expected to rise as a counter to the forces of inflation and currency debasement - much like precious metals.
Like other bullion products, copper comes in both bars and coins. In the US, the major coin product is US pennies minted prior to 1983 when the copper in the coinage was replaced with less expensive zinc. Copper pennies are a great way to invest because the copper can be purchased very close to the copper spot market price. The cost of their fabrication was long ago absorbed, and the only price variable left is the value of the metal they contain.
Worldwide copper has been used in coins with a huge variety of designs and denominations.
Don't mistake the purity of copper bars with the copper wiring you can buy from your local hardware store. Generic copper wiring has lower purity, being alloyed with other metals to achieve particular characteristics needed for the application. Copper bullion bars, on the other hand, are usually sold with a 99.9% copper consistency.
Copper bars come in different shapes as well. One of the most popular choices for investors is the copper cube. It makes for an interesting display piece as well as a good investment opportunity.
Copper bars also come in a variety of sizes and weights. A diversity of items with different price points can be useful in your holding, particularly if the metal should be needed for barter and trade. You can find 99.9% copper bars as light as one-ounce pieces and as heavy as 10-pound bars.
Copper rounds are not always bought for investment purposes. With so many coin models in existence, man people who deal in copper rounds tend to be collectors. That's not to say that investment isn't also a possibility, but the cost of fabricating smaller units (like a 1 oz round) relative to the metal value makes them expensive relative to many alternatives.
Why are copper rounds often more popular with collectors? There are many historical figures and scenes depicted on them. You can find anything from political causes, US presidents, Native American portraits, Lady Liberty, and even designs taken from popular coins.
One reason why there are so many copper coins available from around the world is that the use of copper for coins dates back to at least 9000 BC. It was an easy metal to work with, and useful in to people everywhere in wide ranging applications making it great for exchange.
What's even more important is that copper sparked the Bronze Age, according to historians and archeologists. Once our ancestors realized how easy it was to combine copper with other metals and fashion even stronger tools, the "Bronze Revolution" started.
The first coin to be struck by the US Mint, at the original location in Philadelphia, was a penny produced in 1793. This "Flowing Hair Cent" was roughly the same size as a modern 50-cent coin and it was made of copper. It features the word Liberty on the top and a side-portrait of a woman with long, flowing hair.
Today national mints have largely stopped using copper in coins intended for circulation. The metal value has exceeded the denominated value in many cases. As an example, the one-cent coin in circulation today was changed from 95% copper to 2.5% copper in 1983. Today the modern zinc penny's days are numbered as the cost of producing it is more than 1 cent.
Copper may not carry the higher values of the precious metals, yet is has a place in the bullion investment market. What makes it a good investment opportunity? Copper is used in an endless number of industrial applications, but it is far more scarce than commodity metals such as iron.
Copper bullion is cheaper and more accessible than gold and silver. This makes it easy for almost anyone to start investing in copper.
There will always be a use for copper, but supplies are limited which is a recipe for price appreciation over time. Couple the supply and demand fundamentals with the perpetual devaluation of fiat currencies and the potential for gains increases.
If you have the patience and are willing to play for the long-term, then copper bullion offers an affordable investment option with an attractive potential for returns. The emphasis, as with any investment, is to keep transactions costs (the premiums paid above the copper spot market price) low.
Investors can buy bars in bulk or collect coins to add interest to their hold until the time comes to sell. The affordability of copper puts this market in reach of any investor - regardless of means.