Metals have had a record year with recent increases in the prices of gold (GC=F) and silver (SI=F), but there is a third metal that is reaching its own all-time highs. Copper prices have risen more than 35% this year, preparing to post the biggest annual gain since 2009, driven by growing technological demand, supply constraints and tariff uncertainty.
Global copper prices (HG=F) officially surpassed $12,000 per ton on the London Metal Exchange on Tuesday for the first time and continued to rise on Wednesday.
Each type of metal reacts slightly differently to economic conditions and copper is no exception. However, unlike gold and silver, copper is not as directly influenced by investor sentiment or economic expectations. Its price movements can generally be attributed to physical growth and expansion.
Copper is often considered a barometer of the economy. It plays a central role in power grids, construction, industrial machinery and more. When there is demand for those types of goods or services, it is usually a good sign that the economy is in good health, which gave copper its nickname: Doctor Copper.
Rising copper prices often indicate strong industrial demand and a rapidly growing economy, while falling prices can indicate an economic slowdown, according to Goldman Sachs Research. Copper is “a major beneficiary of investments in electrical grids and infrastructure globally, as artificial intelligence and defense increase the need for robust and secure energy networks,” Goldman Sachs Research analyst Eoin Dinsmore wrote in a note.
Gold is considered more of a “safe haven” asset and a hedge against inflation. Silver lies on the line between gold and copper and has industrial and investment purposes. Copper, however, is predominantly industrial. It is generally not purchased for storage like gold or silver, but rather for use, which is why it is often the strongest indicator, of the three metals, that the economy is moving in the right direction.
Read more: Why does silver outperform gold? What to know before investing.
There are a few key reasons why copper is seeing a rally right now. Major copper-producing regions, such as Chile and Indonesia, have faced supply challenges and environmental disasters that have contributed to a global copper shortage and a tighter market.
“After essentially flat mining supply growth expected this year, our 2026 mining supply growth estimates have fallen to just around +1.4%, or around 500 kmt lower than our estimates at the beginning of the year,” Gregory Shearer, head of base and precious metals strategy at JPMorgan, said in a statement.
A drop in supply is not the only factor driving up prices. In July, the Trump administration imposed tariffs on several categories of copper imports, putting additional pressure on the market. At the same time, heavy investments in the AI sector are significantly driving demand due to its dependence on copper for data centers.
One source estimates that hyperscale AI data centers can use up to 50,000 tons of copper per facility.
As for where prices are headed, JPMorgan Global Research expects copper prices to reach $12,500 a ton in the second quarter of 2026, averaging around $12,075 a ton for the full year.
While researchers are optimistic that copper prices will continue on an upward trend, experts say the long-term implications of recent price increases remain uncertain.
“The intersection of tariffs and copper prices in July 2025 highlights the complex dynamics of global trade and commodity markets,” said David Koch, CFP and director of portfolio management at Halbert Hargrove. “While the immediate effect has been a sharp rise in copper prices, the long-term consequences will depend on how markets, governments and industries adapt to this new trading environment.”
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