By: Pursuit Wealth Management
The Winter Olympics open this week in Milan, a global showcase of discipline, precision, and marginal gains measured in hundredths of a second. Yet one thing remains constant. Every event ends with athletes on a podium, medals draped in gold, silver, and bronze. The symbolism is universal. Gold represents supremacy. Silver rewards excellence just short of the peak. Bronze honors resilience and staying power, recognizing those who withstand the grind, absorb setbacks, and still finish standing.
Markets, it turns out, are staging their own version of the Olympic podium.
The Precious Metal Podium
The rally in precious metals has been anything but quiet. Gold, silver, and copper have surged to record levels and investor attention has swung decisively toward hard assets. Financial television, market commentary, and portfolio strategy discussions have all been dominated by the same question: What is driving the demand for precious metals?
Even with the broader uptrend still well intact, it is worth addressing the sharp reversal visible in recent price action. Metals suffered a violent sell off last Friday as optimism around rate cuts was reassessed following President Trump’s nomination of former Fed Governor Kevin Warsh as the next Fed Chair. Spot silver fell roughly 28% to $83.45 an ounce, its worst single day decline since March of 1980. Spot gold shed approximately 9%. While the Warsh nomination acted as the trigger, the broader driver was profit taking. After a meteoric twelve months, investors were quick to lock in gains at the first sign of pressure. While the pullback grabbed headlines, it did little to change the underlying dynamics driving interest in precious metals.
For gold, the case is straightforward. Investors are confronting rising fiscal deficits, escalating geopolitical risk, and a growing unease about the long-term credibility and independence of monetary policy and the Federal Reserve. Garnishing this consternation cocktail, the U.S. dollar has dropped more than 10% over the past year. Central banks have been steady buyers of gold, reinforcing the perception that precious metals are once again being treated as a form of insurance rather than a speculative trade.
Like Olympic gold, the metal at the top of the podium commands the most attention when uncertainty rises.
Silver’s resurgence fits neatly into that narrative as well. Historically more volatile and more economically sensitive, silver tends to amplify gold’s moves when investors become anxious. It shines brightest when markets are searching for protection but still willing to take risks. In that sense, silver has earned its place alongside gold in the current metals conversation.
But the Olympic podium is not complete without bronze. Fun fact, bronze is primarily an alloy of copper and tin, with copper typically making up around 88%-95% of traditional bronze. And in markets, copper fills a similar role to bronze. It rarely gets the headlines, but it often carries the greatest weight.
Gold reflects fear. Silver magnifies it. Copper reflects reality.
Copper Price Action
Over the course of 2025, prices of copper rose from approximately $8000 per ton to the mid $12,000s. The metal got a significant boost over the summer after President Donald Trump announced a 50% tariff on copper and copper-intensive goods, a move aimed at reducing reliance on foreign suppliers and strengthening the domestic supply chain. Later that month, the administration clarified that the final tariff would apply only to semi-finished copper products and copper-intensive derivatives, not raw or refined copper. This caused prices to drop briefly, but supply disruptions, most notably major mudflows at Freeport McMoRan’s Grasberg mine, one of the largest supply sites in the world for copper, sent prices back on a steady upward trend. The metal finished the year up more than 40%, its biggest annual jump since 2009. Priced per pound, copper is currently trading near $5.92 with prices topping $6.50 just last week. Overall, the outstanding performance represents a structural reassessment of one of the most frequently utilized metals globally.
The Metal Behind the Machines
Copper’s relevance today has far less to do with sentiment and far more to do with physics. Unlike gold and silver, copper does not necessarily benefit from uncertainty. It benefits from construction, electrification, and scale. And few forces are more copper intensive than the ongoing buildout of artificial intelligence. AI is often framed as a digital or software driven revolution, but its real footprint is physical. From powering electric vehicle engines, battery systems, charging infrastructure, renewable energy installations, and data centers, new-age physical technologies necessitate significantly more copper than traditional infrastructures. Large language models and advanced computing systems require enormous amounts of power, far exceeding that of traditional data centers, with modern AI facilities often consuming several times the electricity per square foot of conventional data centers. In the United States alone, data center power demand is projected to roughly double over the remainder of the decade, forcing utilities to rethink grid capacity and transmission investment. That power must be generated, transmitted across long distances, stepped down through substations, distributed locally, and dissipated through complex cooling systems. Copper is essential at every step of the process. From high voltage transmission lines and transformers to server racks, power distribution units, and cooling equipment, AI is ultimately an electricity story, and electricity is a copper story.
Supply & Demand Factors
What makes this shift particularly important is that it is not cyclical. Previous copper bull cases were often tied to housing booms, emerging market industrialization, or Chinese infrastructure cycles. The AI driven demand is different. It’s structural, global, and largely non-discretionary. Hyperscale data centers are being planned and built regardless of economic conditions, and utilities are forced to accelerate spending simply to keep up. In many regions, the limiting factor for new AI capacity is no longer capital or land, but access to reliable power. That constraint pushes demand upstream into the power grid itself, where copper intensity is highest. As a result, copper demand is rising on a timeline measured in years. According to S&P Global, copper demand is now expected to surge from 28 million tons in 2025 to 42 million tons by 2035. With the supply constraints highlighted below, the market will likely run up against a 10-million-ton shortfall. Markets are accustomed to thinking about copper in cycles. The AI buildout challenges that framework entirely.
The problem, of course, is that supply cannot respond nearly as quickly as demand is accelerating. New copper projects are notoriously slow to come online. From permitting through construction, a typical copper mine takes at least 10 years and declining ore grades means that even when projects are completed, output growth is muted. Unlike gold or silver, which can be hoarded or moved with relative ease, copper is a physical bottleneck. You cannot conjure more of it overnight.
At the same time, the regions capable of producing incremental copper are limited. Chile, Indonesia, and Peru remain the dominant global sources, but have encountered disruptions. From technical challenges and environmental issues, to political risk and labor disputes, all constrain production. Leading producers such as Freeport McMoRan and Codelco are grappling with aging infrastructure. Even if prices rise, supply elasticity is low. The combination of accelerating demand from AI, electrification, and grid expansion with inflexible supply creates a rare setup in modern commodity markets.
The result is a market that is structurally underestimating the gap. Traders may treat copper like any other cyclical metal, reacting to macro headlines, inventory reports, or Chinese construction data. But the real story is different. AI, data center electrification, and grid modernization are not optional projects that can be postponed. They are essential and incredibly capital intensive. Copper is not merely a tradable asset. It is one of the key physical foundations of an economy that is fueled off the AI buildout.
Markets may be fixated on gold and silver, dazzled by their shine and symbolism. But while those metals reflect fear and sentiment, copper tells the story of what must be built. AI, electrification, and grid expansion are essential, power-hungry, and copper intensive. The metal may not dominate headlines, but it dominates reality.
Gold protects against what might go wrong. Copper powers what must go right.
Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Investment advice offered through Great Valley Advisor Group (GVA), a Registered Investment Advisor. I am solely an investment advisor representative of Great Valley Advisor Group, and not affiliated with LPL Financial. Any opinions or views expressed by me are not those of LPL Financial. This is not intended to be used as tax or legal advice. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Please consult a tax or legal professional for specific information and advice.
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