Copper Price Forecast – Divergence from Gold Fuels New Bullish Phase in Copper
The growing demand for copper is running into an inflexible supply chain.
SEATTLE (Scrap Monster): Copper prices increased significantly in 2025 following an explosive rally in gold and silver. In my opinion, this divergence marks the beginning of a catch-up rally in copper, aided by structural supply shortages, the weak U.S. dollar and accelerating demand in the AI and energy sectors. This article presents the macro catalysts, technical structure, and related market confirmations that set the stage for further upside in copper in 2026.
Gold and Silver Explode Higher, Leaving Copper Undervalued
The year 2025 was a turning point in history for the precious metals complex. The Federal Reserve lowered interest rates, which depressed the U.S. dollar and set off a massive rally in all hard assets. Gold rose more than 70% in 2025 and reached a price of more than $4,500 an ounce. On the other hand, silver price beat gold and went over 140%, trading above $70, after peaking near $84 in 2025.
This great surge brought the gold-to-silver ratio to historically low levels, indicating a great momentum across the precious metals space into 2026. The explosive move saw a rush into metals, with new capital chasing parabolic gains. However, despite this frenzy copper is notable for a different reason. It hasn’t broken record highs yet and continues to trade around the $5.70 per pound level leaving it relatively undervalued compared to its peers.
Copper Starts Catch-Up Rally as Macro and China Tailwinds Strengthen
The price of copper has increased by more than 40% in 2024-25 to become the best year since 2009. This rally is fueled by a number of macro and structural forces. These forces are U.S. dollar weakness, tightening supply, and rising global demand associated with energy transition and AI.
The Chinese economy is contributing to the soaring copper prices. Q3 GDP beat expectations for a 1.1% increase quarter over quarter. Moreover, the government injected liquidity, supported credit markets and promised future rate cuts. These actions fixed demand and helped boost copper prices in 2025.
In addition, U.S.-China trade tensions are now coming off. The Chinese government has stressed its economic strength, describing the economy as “a vast ocean capable of withstanding storms” despite the challenges in the global economy.
AI Boom and Green Energy Shift Redefine Copper Demand
Traditionally, copper prices follow the economic cycle around the world. This link is now changing as gold and silver are at record levels but copper is also trading close to record levels. This surge in copper prices is being caused by a new price insensitive buyer, the AI sector.
Modern data centers require a lot of copper for power distribution and cooling. As a result, copper demand from data centers could reach more than 572,000 tonnes. In addition, the deployment of green energy is still growing in 2025. EVs, solar, wind and grid upgrades all rely on copper. These trends are creating a new demand base that is sticky and accelerating which could lead to further upside in copper prices.
According to Statista, the demand for copper, lithium, Cobalt, and Nickel is likely to skyrocket by 2040.
Copper Faces Structural Deficits Amid Supply Constraints
The growing demand for copper is running into an inflexible supply chain. New copper mines take more than 15 years to develop. Existing mines are faced with declining ore grades, and there are few large scale projects in the pipeline.
Wood Mackenzie is projecting a refined copper deficit of 304,000 tons for 2025 to 2026. This shortfall is structural and not cyclical. Demand can spike rapidly, but supply cannot follow in a timely manner. This imbalance provides a floor for copper prices. It also turns the narrative on its head – copper is no longer an economic barometer, it is a constrained asset that is critical to global technology, energy and infrastructure changes.
Courtesy: www.fxempire.com