Related: Copper ETN Nears a Bear Market
Bloomberg points out that copper prices relative to prior economic expansions and contractions do not always jibe. While copper prices during expansions and often decline during recessions, the red metal rarely does so in advance of those economic scenarios, indicating its predictive power is potentially overrated.
“ometimes copper prices remain flat; in other cases, they decline as the economy gathers strength. After the recession of 2008 came to an end and the economy began its slow recovery, copper prices initially went up significantly, and then went back down again as the economy gathered steam,” reports Bloomberg.
For more information on Copper ETFs, visit our Copper category.