Copper ETF | Copper and Oil ETF Investments Versus Gold

Copper and Oil ETF Investments Versus Gold

With the recent drop in copper and oil prices, it’s easy to be concerned as to whether a copper or crude oil ETF is a wise investment. The July delivery rates for both oil and copper showed a steep decline, with crude oil coming in at just $71.40 a barrel, and copper prices bottoming out at $2.81 a pound, having declined at the same rate. Gold on the other hand has had a slight rise, reaching $1,217.70, a sharp contrast to the aforementioned commodity funds.

However, if you have an oil or copper ETF, this is not necessarily the time to cash it in at a loss. While they both sustained heavy losses, there is no reason to assume that their prices will continue to decline.

Both crude oil and copper are essential resources, and neither has a viable substitute to take it’s place. While they have decreased in value recently, it’s easy to understand why that’s happened, and why their prices are likely to go up in the near future.

For one thing, the recent oil spill scandal has made many people wary of oil ETFs, and whenever there is a concern about a particular investment, prices tend to fall accordingly. But when the expected deep-water oil drilling regulations in the U.S. take place, the costs of obtaining oil will rise, bringing up the barrel price considerably.

At the same time, China has been buying less copper than usual, contributing greatly to the decrease in price. But investigations have revealed that rather than using less of this metal, China is just dipping into the reserves that it has been stockpiling for years. While this may be in an effort to decrease the price– which it has succeeded in doing– at the same time it means that the prices will eventually go back up, which should be a relief to those investing in copper bullion and ETFs.

Gold however, doesn’t have the same inherent plus that these practical and necessary commodities do– it is replaceable. It’s value is mostly a perceived one, not an inherent one, and since it is not a vital ingredient in economic progression, a shift in the monetary standards can easily bring it’s value down fast.

With external factors playing a major role in this year’s price drops, and the demand for copper and oil ever-increasing, it’s safe to assume the prices should be on the rise before long. If you asked me to place my bets on the best oil ETF or an even better gold ETF, the oil would win, hands down.

Filed Under ETFs, Investing In Copper | Leave a Comment

Tagged With , , , ,

Comments

Leave a Reply