Commodity prices have gone far from their 52-week highs. At the same time, Barrick's CEO and President predicts rapid price increase in the near future. The value of gold, copper and other metals is about to rise along with the demand.
The crucial thing here is that people do not have enough copper and other metals to meet their green-energy needs. The world has already established transparent clean energy plans. However, experts say they may turn out to be too ambitious due to the lack of copper.
This fact will have a huge impact on the commodity price, as other metals are also involved in the process of green-energy production, especially when it comes to building up-to-date energy infrastructure.
One of the main problems according to Barrick CEO Mark Bristow is the fact that the entire clean energy strategy looks too aggressive. It will keep the high demand for copper for a long time, considering current supplies are not enough to cover running goals. “We simply do not have enough copper to support the vision of being a clearer and greener planet”, says the Barrick owner and President.
Investors have been watching the commodity price drop by 30% taking it far away from the 52-week highs. However, we should take into account the ability of commodity markets to price in the short-term perspective rather than fully computing longer-term timeframes.
In other words, what we have seen with the copper price is just a short-term effect, while miners and long-term investors must look long-term. Additionally, we should clearly understand that bringing copper into production will take miners and manufacturers some time.
The main thing in favor of the market is the fact that 2022 has been a good year for copper. Miners had a very volatile year making it possible for the entire sector to make significant gains even despite the late price drop.
Gold production has been roughly flat this year compared to the previous one. At the same time, gold stocks have been showing the same volatility as copper. Additionally, starting on August 27, the gold rate started making some positive moves (1.001% for the 22 Carat segment and 0.997% for the 24 Carat segment).