Rising inflationary pressures are very bullish to copper, silver and gold. Investors turn into these assets because they are a very good hedge against inflation.
As such, BCA Research said they forecast gold to soar in the long term, since the Federal Reserve will maintain an ultra-soft monetary policy in the face of rising inflationary pressures.
Currently, gold is growing steadily, continuously rising above $ 1,900.
Copper is projected to shoot up as well, but it will continue to experience a significant supply-demand imbalance that could last for years. Apparently, new political regimes and tax structures in mining jurisdictions are creating obstacles to companies looking to build new projects or expand mature deposits.
Nevertheless, copper will exceed $ 5, thanks to high demand in all areas of production. It should hit higher price levels to see more supply in the market.
Also, not only do mining companies face huge capital costs when it comes to building new mines, but now they have to account for higher costs when compliance with their Environmental and Social Governance (ESG) standards comes into play.
At this time, mining companies have focused on improving their environmental impact and social standing as consumers set high standards.
This increased focus on EGS means higher costs for quality and advanced design in mines, which includes developing renewable energies, improving water use and restructuring storage facilities and dams.
So, in the face of rising costs and demand, copper will rise, which will lead to increased inflationary pressures.
