As physically-backed copper ETFs make their way into the markets – one is already trading in London – the belief is that demand will increase and create even more of a shortfall. Whatever happens with the ETFs, copper’s widely seen as being the tightest of the other base metals.
Analysts say that the rally in copper prices to new highs above $9,700/ton is being driven by the market’s underlying fundamentals. Concerns are building that a correction is likely at some point.
If a correction does rear its head, a simple strategy such as trend following may help limit your downside risk.
Aside from the miner funds above, there are two other ways to get copper exposure: iPath Dow Jones-UBS Copper ETN (NYSEArca: JJC) is an exchange traded note (ETN) that tracks a basket of copper futures; PowerShares DB Base Metals (NYSEArca: DBB) owns futures on copper, aluminum and zinc.
Tisha Guerrero contributed to this article.