Is it profitable to invest in copper?
Copper is a metal that has ductile and malleable property and it is a good conductor of heat and electricity. Some common usages of this metal include plumbing, wiring, making of utensils, heating applications etc. Some of the usages of copper is done in the form of an alloy along with some other metals. ETF or the exchange traded funds have made the natural resources as better opportunities for investments.
This has classified the commodities as the fourth asset class which provides the investors with good amount of cash flow. Copper has an important place in the commodity trading world. About 7000 years ago, the color, softness and the abundance in which it was found made it a desirable material.
Today, this metal is considered as the indicator that the economy of a country is good.
After iron and aluminum, copper is the third metal to be so widely used all around the globe. It is used in areas such as industrial machine manufacturing, construction, electronics. As this metal has become so much in demand, trading the future of this metal can be a profitable business.
How to invest in copper?
This would be a query in the minds of many investors. As more usages of copper will come in existence and more applications start using copper, the demand of copper will keep on increasing. The copper stock price is rising due to many new investment opportunities will be developed for the traders in this precious metal. The increase in the usefulness of this metal has made it a popular metal but it value may depend on the industrial need that this metal has.
There are other factors too that can affect the ETF of copper and these include supply, demand and the housing projects. Copper can be used in various applications in building construction. The current copper price may get a push when there are many housing projects being anticipated. Similarly a lack in construction projects being run would lead to lowering of price.
Investments
The rise in demand for this metal from China has become one of the factors for the rise in its price. This is therefore a matter of concern for the investors. You can use the ETN (exchange traded note) if you want to invest in copper. Investing in copper doesn’t mean you have to actually invest in copper but you actually invest in the unsecured debt instruments and in copper bullions. There are various ETFs where you can invest in copper. Some of them include iShares Chile ETF, PowerShares DB Base Metals Fund (DBB), iPath Dow Jones-UBS Industrial Metals ETF (JJM) and Elements Rici Metals Total Return ETN (RJZ). They have aluminum as well as copper allocations.
To gain more profit from the ETF of copper in China, you need to consider the economic condition of China as it is the source of one of the largest consumers of copper. The amount of copper being consumed is a major factor that would lead to the decision whether the price of copper will rise or fall. If you ask if investing in copper bullion is good, the answer would be yes but you must do proper research about the market before making a decision.