The copper-to-gold ratio is one of the stronger indicators of global economic health, directly correlated with economic trends. When the economy is growing, the demand for copper rises and investments in gold as a stable asset go down, increasing the ratio. On the flip side, economic contraction results in a rising demand for gold as a “safe haven,” causing the ratio to drop.
Among the reasons for the decrease are the economic slowdown in Europe, the slower than expected recovery of the Chinese economy, Russia’s invasion of Ukraine as well as the $2 billion addition to its supply stockpile by the Democratic Republic of the Congo. However, according to, the latter is unlikely to influence the copper market price long-term.
China’s copper demand remains dampened as its economy is still recovering from the slowdown caused by the pandemic. LME copper prices prove this, as the benchmark has recently been bouncing between $3.57 and $3.84 per pound. This range is similar to what prevailed during the pandemic, suggesting a less optimistic view of China’s demand for copper in the short-term.Ultimately, over the longer term, a copper shortage will likely prevail.
RIO Tinto is planning to invest approximately $920 million in the Kennecott copper development in Utah to meet growing copper demand in the U.S. The company expects the demand for the metal to grow in the long-term due to the energy transition that is happening globally.points to production of between 1,635 and 1,825 kt in 2023. This will be an increase of 12 per cent year-over-year from 2022.