A sense of FOMO has gripped investors following the sharp rally in precious metals over the past year. Silver prices have surged over 200% in the last 12 months, while gold has rallied nearly 95%. This rapid appreciation has pushed prices to elevated levels, making direct exposure increasingly unaffordable for certain retail and small investors.
Investors are increasingly questioning the sustainability of the rally in gold and silver amid the linear surge in rates, and are increasingly looking for alternative metals to bet on. As per analysts, copper can emerge as a worthy candidate.
For investors who missed the sharp rally in gold and silver, copper is increasingly emerging as the next macro-linked opportunity rather than a catch-up trade, said analysts.
Copper, which is being referred to as “the next gold”, is likely to continue its bull regime in 2026, said Heena Naik, Research Analyst – Commodities, Angel One.
What’s behind the copper rise?
In the last year, copper prices have surged 50% in the domestic spot market, largely driven by tariffs unleashed by the US and major mine outages.
In July of 2025, the US President announced universal 50% tariffs on imports of 51 types of semi-finished copper products, excluding raw copper materials. Goldman Sachs Research’s base case is that a 15% tariff will be announced in mid-2026 on refined copper, which has already led to many buyers stockpiling copper in the US in advance of the expected import tax, creating expectations of temporary scarcity outside of the US, opined Naik.
The diversion of LME stocks to the US market has led to low inventories in China, Russia and European LME warehouses. This temporary scarcity outside of the US is leaving everyone else short of metal, causing a huge arbitrage gap, she added.
Apart from this, there were three major mine outages in 2025, which fueled the bull run in copper prices. Years of underinvestment, declining ore grades in Chile and Peru, and project delays have further tightened the market, keeping inventories near multi-year lows across major exchanges.
The Grassberg Block Cave portion of the mine, which accounts for 70% of previously forecasted production, is expected to remain closed until the second quarter of 2026. In addition, production in Chile and Peru has also been affected due to labor problems and protests, compounding the supply shortage.
“Adding to supply woes, declining ore grades and years of underinvestment have limited miners’ ability to meet growing demand quickly. Another sign of stress in copper right now is the concentrate market, where smelters are increasingly competing for raw copper material that becomes refined copper. Nonetheless, the copper tariff risk remains, which is likely to influence the prices of copper in 2026,” Angel One analyst opined.
Copper demand, meanwhile, continues to boom as it is a direct play on global electrification, energy transition, and infrastructure spending. Naik said that the supply disruption issues are going to continue at least till mid-2026 which shall continue to influence copper prices.
Is copper a good bet?
With EV penetration rising, grid expansion accelerating, and renewable capacity additions scaling up, copper demand growth is now structurally higher than it was in the last cycle, said Harshal Dasani, Business Head at INVasset PMS.
He believes that while copper prices have already moved meaningfully, the cycle does not appear stretched yet.
Ross Maxwell, Global Strategy Operations Lead, VT Markets, said that for investors who missed the precious metals rally, copper is increasingly viewed as a strategic opportunity rather than a speculative chase. He observed that in an environment characterized by strong demand and limited supply, any incremental demand can trigger a disproportionate acceleration in prices.
Analysts said that copper should be seen not as a short-term trade, but as a strategic allocation aligned with the next phase of global industrial and energy transformation.
“It is important to note that copper is less driven by macro uncertainty and more about industrial demand, making it complementary to gold and silver rather than a direct replacement,” said Maxwell.
Over the medium term, a sustained global electrification cycle could support copper moving higher by 25–40% above historical averages, Maxwell projected.
Sharing a price target for copper, Naik said the speculative peak in copper prices is likely to continue in the coming days due to US economic growth, AI spending, and US stockpiling. “MCX Copper Feb Futures is likely to surge towards ₹1365 per kg in the near-term. Break of same could push the metal towards ₹1410 per kg,” she opined. MCX copper futures traded 1% higher at ₹1328.95 per kg on January 28.
However, she said that the recent Critical Minerals Section 232 decision suggests that the Trump Administration is no longer relying solely on tariffs to enhance the US security of supply in metals. “This means that if tariff threats fade and trade routes normalize, excess inventories could quickly hit the market, causing speculative trades to unwind. In such an instance, copper prices could fall just as fast as they have risen,” she warned.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions.
