Why Trade Copper - AS-HOM GLOBAL

Copper Trading

One common method of portfolio diversification is through trading in commodities and precious metals like copper. The guide you need to trade the copper market is right here.

Why Trade Copper?

Highly liquid

Copper is commonly traded on global commodity markets, and its price movements are often used as a barometer for the world economy.

Consistent demand

Copper is widely used in the manufacturing of many everyday items, such as electric wiring, microwaves and home heating systems. It follows that any increase in demand for copper is indicative of activity in the wider economy.

Value

Copper tends to be significantly less expensive because it is found in nature in greater quantities than gold, silver, and platinum. However, the mass industrialization of developing nations has steadily increased copper production in recent years.

Why Trade Gold?

Why Trade Silver?

Why Trade Copper?

Why Trade Platinum?

What affects Copper prices?

Emerging Economies

The demand for copper has significantly increased as a result of recent rapid growth in countries like China, India, Brazil, and others. The performance of emerging markets, particularly their capacity to maintain their growth rate, should be monitored by copper traders.

Supply Uncertainty

The price of copper may be directly impacted by political unrest. For instance, copper is primarily mined in South America. Bolivia nationalized the nation's mining sector in 2007, severely disrupting the supply and driving up prices.

The US Housing Market

Homes frequently contain copper. It is advisable to monitor the US housing market given the size of the US domestic market. Data like GDP (Gross Domestic Product) and non-farm payrolls are important indicators of copper's future price.

Substitution

When the cost of a good or asset rises, traders do this by looking for less expensive alternatives. As cheaper metals like nickel or iron are sought after when copper is expensive, this can serve to lower the price of copper.

Trading Tips in Copper Market

Trading Copper in Practice

Your research suggests a stronger than estimated GDP figure from China and you expect the price of copper to rise.

You buy 10 contracts of copper at 3.1140. This position size equals a gain or loss of $10 per 0.0001 price movement.

Winning Scenario

Losing Scenario

A couple of days later, the copper market pushes higher – to 3.1490 – and you decide to close your position and take your profit. Your winnings are calculated as follows: (3.1490 – 3.1140) x $10 = $350.

Alternatively, demand for copper falls after the Chinese economy underperforms and the price falls to 3.045. Your losses are calculated as follows: (3.1140 – 3.0460) x $10 = $680.