Copper (HG=F) prices have risen this year amid a supply squeeze. Wells Fargo Head of Real Asset Strategy John LaForge joins The Morning Brief to discuss what is driving copper prices higher and the commodity’s outlook.
"We, frankly, are not producing enough copper, and yet, there are buyers everywhere right now for copper," LaForge says. However, he explains that the recent rise "was much more speculator-based and wasn’t about fundamentals."
He adds that commodities have been among the "best-performing major assets out there" since the coronavirus pandemic despite often being overlooked. "Decade after decade, mankind uses more and more commodities, so you have demand going up all the time," he explains. Major factors that impact commodities usually boil down to underlying fundamentals rather than geopolitical roadblocks, LaForge notes.
"We were running dry on refined product. And you had some speculators come in and take advantage of that on a futures basis," LaForge says. He adds that despite this bump in the road, demand will continue to surpass supply, driving prices higher.
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