Gold Isn't the Only Metal Soaring in Price Lately

There’s been a lot of focus on gold lately as prices continue to set record highs in 2024.

But gold isn’t the only commodity soaring in price. Due to events that have impacted global and domestic supply and demand, a handful of other metals are also increasing in value and challenging all-time highs of their own.

These metals — like silver, copper and aluminum — are flying under the radar while experiencing price surges that might have investors considering opportunities beyond gold.

Why are copper prices rising?

While copper is an industrial metal and not a precious metal, demand for it in China and the U.S. is climbing. Because the principal driver is the green energy transition, this appears to be a sustainable long-term trend. Beyond its manifold industrial applications, copper is a critical component in solar panels, wind turbines, EV charging cables and EV charging stations.

According to Kelley Blue Book, 2023 saw a record 1.189 million EVs sold, making electric vehicles the fastest-growing car category by sales. Additionally, U.S. Energy Information Administration data shows that last year, electric generating capacity from renewable sources surpassed both coal and nuclear and should be close to equalling the capacity of natural gas by 2025.

This and ongoing demand for industrial uses like plumbing, electrical grids and home appliances have been driving copper prices higher. The ductile metal has been trading sideways for the past month, but so far in 2024, it has gained more than 11%.

As a result, copper-backed equities are rising in tandem. Numerous exchange-traded funds (ETFs) leveraged to the metal — like the Global X Copper Miners ETF (COPX), which has gained 17% so far this year.

Silver’s no longer taking a backseat to gold

Despite gold setting its all-time high in late October, so far this year, it's underperforming silver 38% to 42%. Silver remains below its all-time high, but it’s currently trading at its highest prices since November 2012.

Demand for the metal continues to outpace supply, as silver and its alloys are integral to the manufacture of batteries, LED chips, medicine, nuclear reactors, solar panels, semiconductors and touchscreens. According to The Silver Institute, demand is expected to reach 1.2 billion ounces this year, which would mark the second highest level on record.

Like gold, silver is seen as a safe-haven asset that performs well during periods of geopolitical unrest. With tensions worsening in the Middle East and no end in sight for the war between Ukraine and Russia, the price of silver should remain elevated.

Silver-backed ETFs are correspondingly on the rise. The iShares Silver Trust (SLV), for example, has seen a nearly 38% gain in 2024.

New sanctions on Russia propel aluminum prices

Another industrial metal — aluminum — has gained 22% in 2024, outperforming the S&P 500's gain of 21% through October.

Ongoing economic sanctions by the U.S. and U.K. against Russia, the world’s third-largest producer of the metal, have bolstered prices as global supply has tightened.

Though it’s unlikely to challenge its all-time high set in March 2022, aluminum is likely to continue climbing as demand for the lightweight, durable and corrosion-resistant metal increases. According to the World Economic Forum, demand is expected to increase by almost 40% by 2030 as “transportation, construction, packaging and the electrical sectors will drive demand and account for 75% of the total metal required.”

The rise for aluminum equities is similar to that of copper and silver, with major companies like Century Aluminum (CENX) and Alcoa (AA) up 49% and 21%, respectively, this year.

Other metals tagging along — and how to invest safely

Copper, silver and aluminum aren’t the only metals upstaging gold in 2024. Tin prices are being bolstered by outbreaks of violence in areas critically important to the mining of its ore in the Democratic Republic of the Congo and Rwanda. Prices of the pliable metal have shot up 29% this year.

Zinc is also joining the rally. China — the world’s largest zinc consumer — recently saw its factory activity expand at the fastest pace in over a year, with similar trends developing in the U.S. and Germany. As a result, zinc prices have appreciated 21% in 2024.

Platinum and palladium, both precious metals, have appreciated 7.72% and 12.15%, respectively, this year.

While base and precious metals are currently surging in price lately, short-term trends shouldn’t dictate your investment strategies. For example, the aforementioned aluminum producer, Alcoa, saw its stock soar to an all-time high in the first quarter of 2022 amid ongoing supply chain issues. But investors who waited for the rally to invest saw their shares fall sharply over the following six months, with prices dropping around 63%.

A safer approach to diversifying a portfolio with exposure to metals would be choosing an ETF that’s focused on a metal that isn’t being propelled solely by short-term drivers. ETFs provide broad industry exposure by allocating funds across a basket of stocks, and this approach can be undergirded by choosing an ETF focused on a metal with long-term tailwinds.

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