Copper is beating gold in 2026: Why the industrial metal is emerging as a market favourite

Copper is emerging as one of the standout commodities of 2026, riding a wave of demand from artificial intelligence, electricity infrastructure and military modernisation even as concerns grow over stretched technology stock valuations.

The industrial metal has climbed 15.8 per cent since the beginning of the year and more than 30 per cent over the past 12 months. Gold futures, meanwhile, have fallen 4.11 per cent year-to-date, highlighting a striking divergence between the two commodities.

The rally reflects a shift in investor attention towards the raw materials powering the global economy’s technological transformation. While gold is traditionally sought as a safe-haven asset, copper is benefiting from the growing need to build data centres, expand power networks and strengthen defence capabilities.

AI boom puts copper in the spotlight

The rapid expansion of artificial intelligence is creating a fresh source of demand for copper, which is widely used in electrical wiring, electronics, construction and power transmission.

As technology companies pour billions of dollars into large-scale data centres, the requirement for copper-intensive infrastructure is increasing. This could help the metal remain resilient even if enthusiasm for AI stocks weakens.

Taylor Melvin, chief executive of Ivanhoe Electric, told CNBC that technology infrastructure and national defence are emerging as important sources of incremental copper demand.

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Large technology companies are unlikely to abandon data-centre projects solely because copper prices rise, given the strategic importance of computing capacity. A similar trend is unfolding in defence, where governments are boosting spending on national security and military infrastructure.

This creates a potential cushion for copper. A correction in technology shares does not automatically mean that investment in the physical infrastructure supporting artificial intelligence will come to a halt.

Supply concerns add fuel to copper’s rally

Alongside robust demand, uncertainty over the availability of copper is strengthening the bullish outlook.

The United States is weighing tariffs on refined copper, creating uncertainty over global trade flows. In 2025, the US Commerce Department recommended a 15 per cent tariff from January 1, 2027, although a final decision had not been publicly announced at the time of the report.

The possibility of tariffs has contributed to a concentration of copper stocks in the United States, raising questions about how much metal will remain available to other markets.

Iain Pyle, senior investment director at Aberdeen Investments and co-manager of the abrdn Future Minerals Fund, has also pointed to exceptionally low Chinese inventories and rising premiums in the country.

In an October 15 note, Pyle identified copper as a clear example of a market where supply is struggling to keep pace with demand. Higher prices may be needed over an extended period to encourage sufficient investment and production.

Although tariff announcements could trigger short-term volatility, persistent supply constraints remain a key pillar of the positive outlook.

Can copper withstand an AI stock market correction?

Copper’s growing appeal rests on the possibility that its demand drivers are becoming broader and more structural.

Artificial intelligence infrastructure, electricity networks and defence spending are creating multiple sources of demand. The metal also remains essential to construction, transportation and electronics, giving it exposure to a wider range of industries.

However, the rally is not immune to risks. A sharper slowdown in global economic activity, weaker industrial production or cuts to technology investment could weigh on prices. Changes in US trade policy could also disrupt supply chains and trigger market volatility.

For investors, the crucial question is whether demand from AI, electrification and defence can continue to absorb available supplies as new production struggles to keep pace.

If these industries maintain their investment plans and supply remains tight, copper could retain its momentum even if technology stocks experience a more substantial correction.