Copper put in one of it's best days ever after markets digested tariff news.
Yesterday’s featured article went into detail for some best practices for including alternatives into your client’s portfolio. It just so happens that at the same time, some big moves were taking place within an area of the asset class not talked about frequently throughout 2025: Copper. Advancing over 13% for the day, HG/ broke to new highs as it put in one of its strongest days since 1989. The catalyst for the move was tariff based, seeing the possible implementation of a 50% tariff placed onto the industrial metal. The exact date of implantation of the increase in tariff was not mentioned as of 7/8. Pharmaceuticals were also a point of emphasis, but won’t be a focus for today’s report.
Most of you won’t have constant exposure to copper within your portfolio. An even smaller percentage of readers will field direct exposure to physical copper contracts HG/ within client accounts. With that in mind, most of today’s conversation with revolve around recent absolute and relative developments for copper proxy CPER & miners representative COPX. While most of the recent attention has been on precious metals and energy names (the good and the bad…) copper has quietly put together quite a strong 2025 campaign. Before yesterday’s large gain, CPER had advanced nearly 24% through 7/7… bouncing up to 34.22% post tariff announcement. The move, as you may expect, brings the name well into heavily overbought territory on its default chart. While near-term price action will most likely be driven on speculation on tariff implementation, it would also make sense to see some sort of normalization- old resistance at the top of the trading band makes sense for a cool down.
If you have been around Dorsey Wright long enough, you know that absolute improvement is only half the battle. Relative improvement is often the next step in any sound investment analysis process. CPER moved back into a column of X’s against domestic equity benchmark SPXEWI for the first time since May, sitting just one box away from posting a buy signal. While chart consistency hasn’t been particularly additive over the last decade, continued upside action would certainly be of interest as a bit of “confirmation” to yesterday’s near-term move.
It isn’t lost on the analyst team that it isn’t entirely practical to utilize a pure switching strategy between domestic equities and copper. What is perhaps more reasonable is comparing copper to other commodities, in this case leader gold. Gold has been a high flier over the last few years, and while it has consolidated around 2025 highs, it remains a relative leader underneath the hood of commodities. A more defensive minded gold also sits at odds with a more economically useful copper, supporting a more “risk-on/risk-off” tone. The chart below compares CPER to GLD on a 3.25% RS chart. Copper remains on a pair of sell signals (said otherwise, gold maintains long term strength…) but the near-term price action has seen copper move back into X’s for the first time in 2025. While we prioritize the long-term signal, keep an eye on this chart if gold continues to tread water while other areas improve.
For those of you looking for more actionable ideas today, copper miners did see more muted returns following the tariff announcement. COPX maintains a strong 4.97 fund score, having returned to a buy signal against the broad market to close June. Sitting on a string of four consecutive buy signals, the fund reversed off 2025 highs and sits on the cusp of heavily overbought territory at the time of this writing. Consider the pullback a decent entry point, but keep in mind that near-term price action could be headline driven and miners are typically susceptible to rapid swings in either direction.
