Considered as one of the most versatile precious metals, copper has been a fixture of human development since man learned how to maximize its many uses. From home plumbing to becoming an integral part of power generation, copper has stamped its importance as the third widely used metal in the world today.

Playing a pivotal role in the economies of the world as a valuable material and a driving force of industrial expansion, copper also provide an investment vehicle for investors in the financial market.

Various uses of copper aside from being a conductor of electricity and heat includes as a construction material and constituent of several metal alloys like sterling silver used in jewelry creations, and as cupronickel that help mint coins, create marine hardware and as constantan for thermocouples among other uses.

Thinking of trading copper with eToro?

78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

History of Copper

This precious metal dates to prehistoric times during the Copper Age starting from 9000 BC in the Middle East as evidenced by a copper pendant dug in archaeological site in Northern Iraq, which is said to date back to 8700 BC.

Copper smelting started in various places all over the world after it was first discovered in China prior to 2800 BC. The use of this metal for investment casting was invented in a much earlier time from 4500 BC in Southeast Asia. During the Bronze Age, copper was alloyed with tin to make bronze metals.

From ancient times when copper was first mined regularly, the demand for this metal remained steady until it rose significantly during the Age of Electricity from the late 1880s until the 1930s. Today, it is widely used in renewable energy, electric vehicles, wiring and cabling systems, Architecture and several more industries thus making copper one of the leading components of the industrial movement.

Since 2016, production of copper hovers in the range of about 20,000,000 metric tons.

Copper metal
Copper metal

Why Do Investors Trade Copper?

Since copper is used in a variety of ways and in massive quantities around the world, it remains as one of the most sought-after commodity in the world market.

Here are the leading reasons why copper is a popular commodity among investors:

  • Industrial Growth: Because copper can be used in an almost unending manner for industrial purposes—namely electricity and heat, it would be hard to picture constructing any piece of industrial infrastructure without using copper.
    As more nations grow economically and expand their industries, expect copper demand to continuously grow. Along with this heightened demand, follows a steady market value for copper.
  • Housing Market: The housing market—despite instances of economic downturns—always finds itself recovering and growing more, therefore bringing the demand of copper to rise sharply.
  • Supply-Demand Imbalance: Mining and recycling copper always falls below the demand for it. Although new mines may mitigate some of the supply shortcomings, environmental limitations and policies limiting new mining sites will cause copper imbalance for many years to come. Because of this, trading copper becomes a popular and useful method to speculate on the supply and demand imbalance.

Trading Copper via CFDs

A leading way to trade or invest on copper is via CFD trading or Contracts-for-Difference trading. A derivative instrument, CFD trading copper allow traders and investors to speculate on the value of copper without having to own ETFs, bullions, options, futures and even a mining share.

When a copper price increases, the value of the CFD also goes up. When it declines, the CFD diminishes value.

Keep in mind: The value of a CFD is the difference between the price of (the asset) at the time of purchase and the price at the time of closing trade.

How to Start CFD trading of Copper?

There are several ways of engaging in CFD trading of copper. All you need to do is find a reliable broker or CFD trading platform such as eToro to open an account and deposit your fund.

Trading copper in eToro's CFD trading platform doesn't require any storage fees since you won't be trading any physical copper.

How to Trade Copper in eToro?

  1. Create an account on eToro / Log-in your account for existing users.
    eToro web-based platform
    eToro web-based platform
  2. Click "Discover".
    Clicking "Discover" on eToro
    Clicking "Discover" on eToro
  3. Select "Commodities".
    Selecting Commodities on eToro's platform
    Selecting Commodities on eToro's platform
  4. Choose “COPPER”.
    Looking for COPPER on eToro's list of commodities
    Looking for COPPER on eToro's list of commodities
  5. Select BUY or SELL.
    Buying or selling COPPER in eToro
    Buying or selling COPPER in eToro
  6. Key in your desired amount to invest or the number of copper units you want to trade.
    Entering amount to invest on COPPER via eToro.
    Entering amount to invest on COPPER via eToro.
  7. Review and set the stop loss, leverage, and take profit parameters.
    Reviewing stop-loss, leverage and take profit on COPPER CFD trade
    Reviewing stop-loss, leverage and take profit on COPPER CFD trade
  8. Select “Open Trade”.
    Executing COPPER buy order on eToro
    Executing COPPER buy order on eToro

Other Ways to Invest in Copper

Aside from CFD trading, most investors invest on copper by buying stocks of mining companies of by ETF (exchange-traded funds) that have exposure to copper.

Some of the biggest mining companies that engages heavily in copper business includes Rio Tinto (RIO), BHP Group (BHP) and Southern Copper Corp. (SCCO).

Southern Copper Corp stock trading on eToro's platform
Southern Copper Corp stock trading on eToro's platform

On the ETF part, these two are the leading choices: United States Copper Index Fund (CPER) and the ETF and iPath Series B Bloomberg Copper Subindex Total Return ETN (JJC).

Alternatively, you can also invest in copper via options, futures or through physical purchase of bullion by buying coins rounds or bars of copper.

Is Copper a Wise Investment?

Similar to other precious metals such as gold and silver, the price of copper will always have volatility associated with it. However, as one of the leading indicators of industrial and economic growth based on its variety of uses, copper can serve as a hedge versus inflation and an appealing option for investors looking to diversify their portfolios.

Copper remains a popular choice for those investing on commodities because of its continuous demand from the industrial sectors around the world.

Ready to trade copper with eToro?

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.

Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.

Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.

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