Broadly speaking, commodities have been a disappointing asset class and that disappointment is compounded by the fact the dollar is weak. However, there are pockets of strength in the commodities complex and that most certainly includes copper.
The iPath Bloomberg Copper Subindex Total Return ETN (NYSEArca: JJC) is higher by 4.6% over the past week, bringing its gain over the past month to almost 9% and its year-to-date gain to about 12.7%.
Industrial metals like copper, nickel, iron and steel have all rebounded in recent months as traders bet on improving global economic conditions would bolster demand for the base metals after prices hit multi-year lows. Copper‘s technicals merit a look at the moment.
“Before the election last year, Copper hit rising support at and spent a good six months testing this support. After support held for a good length of time, a rally then took place, pushing it up to test the top of falling channel resistance,” according to ETF Daily News. “Of late, Doc Copper is breaking above 6-year falling resistance, which historically is a positive sign for Copper. Positive sign for other companies in the industry? Sure could be.”
Related: Copper ETN Could be Ready to Shine
Similar to index-based exchange traded funds, ETNs also track some sort of index as part of their investment strategy. However, an exchange traded note, like the name implies, is a type of debt note that trades on an exchange. Additionally, the underwriting bank that issues ETN shares may choose to stop share creations.
Copper’s surge is benefiting other ETFs as well. For example, the SPDR S&P Metals and Mining ETF (NYSEARCA: XME) is up 4% over the past week and 11% over the past week. XME holds a basket of miners of industrial and precious metals, so it is not a dedicated copper fund, but it does have some exposure to copper miners.
Investors looking for an ETF dedicated to copper miners can consider the Global X Copper Miners ETF (NYSEArca: COPX), the sole U.S.-listed copper miner-focused ETF. COPX tracks the Solactive Global Copper Miners Total Return Index and is up a staggering 21% over the past month.
For more information on the mining sector, visit our metals & mining category.