Copper Outperforms Gold Amid Rising Demand from AI, Power Grids, and Defense
Copper has surged nearly 16% this year due to strong demand driven by artificial intelligence infrastructure, power grid investments, and increased defense spending. Investors believe the metal's inelastic demand—especially for critical technology applications—will help it withstand a potential AI-driven tech sector slowdown. Ivanhoe Electric CEO Taylor Melvin highlighted that copper is becoming increasingly strategic as governments prioritize securing reliable supplies of essential metals. The U.S. remains central to this trend, with uncertainty over proposed tariffs and low Chinese inventories reinforcing bullish sentiment among investors like Iain Pyle from Aberdeen Investments. Despite recent volatility in tech stocks due to concerns about AI spending sustainability, Melvin argues that copper demand is resilient because large-scale data center investments are unlikely to be deterred by the metal's price. The combination of national security priorities and infrastructure growth continues to drive long-term demand for copper.
Topics: artificial intelligence commodity demand defense spending power grids