Copper is a primary industrial metal and a leading indicator of global economic health, while Gold is the exact opposite, recognized as a traditional safe-haven asset and a store of value during economic recessions.
Vaccine euphoria has been the biggest driver for commodities in the final quarter of 2020, as the market expects that an effective vaccine could stimulate a global economic rebound next year.
Since the vaccine announcements last month, the commodity market has seen an investment rotation, with investors moving away from the safety of Gold and Silver and jumping into riskier metals such as Copper, Iron Ore, and Aluminium which could benefit from the recovery of the industrial activity.
The price of Copper climbed to the highest level since March 2013, touching 3.50 dollars per pound and getting support from the recovered industrial demand from China and supply disruptions from South America.
After touching a record high of 2.075 dollars per ounce on August 07, Gold has retreated by more than 10% on risk appetite and outflows from Gold ETFs. However, Gold holds the support level of 1.800 dollars per ounce, getting support from the lower US dollar and the risk for higher inflation from the massive fiscal and monetary policies.