Metals, miners, and momentum

Over the past couple of weeks, traders and investors who follow metals and mining stocks have been treated to what is probably (to them) a familiar storyline.

Gold, which has outperformed the S&P 500 (SPX) over the past 15 months or so, kept itself in the headlines when last week’s fresh record highs propelled it above $3,000/ounce for the first time in history. Meanwhile, silver, which is neck-and-neck with gold during the recent rally, rarely gets the same amount of attention, perhaps because it’s nowhere near its all-time highs.

Copper may be even more of an afterthought, even though it has outperformed gold handily so far this year and, on Wednesday, hit an all-time high of its own:

The strength in all of these metals is one reason mining stocks have been one of the strongest S&P industry groups so far this year, up nearly 17% as of Tuesday.

But copper’s recent move is unique in that it has arguably been tied to tariffs. Prices began accelerating to the upside in February as the Trump administration announced it was looking into implementing copper tariffs for “national security” reasons.¹ This month’s rally has been even larger.

In addition to the record high in copper prices, though, Wednesday also saw the Global X Copper Miners ETF (COPX) post unusually high call options volume. And copper-mining stocks like Freeport McMoRan and Southern Copper (SCCO) extended their recent breakouts above their January and February highs:

Earlier this month, SCCO hit its lowest level since March 2024, while FCX touched its November 2023 lows. Both stocks have double-digit percentage gains since then—their biggest upswings since last September.

April 2 is the working deadline for several previously announced tariffs. This story has taken many twists and turns over the past several weeks, and there is little consensus as to which tariffs may be implemented, or how long any will remain in place. On Monday, for example, the White House announced new potential tariffs (on automobiles and pharmaceuticals), but also dangled the possibility that certain countries could get “breaks” on the levies that are supposed to go into effect on April 2.²

In a way, copper and copper-mining stocks may be in a position similar to that of a stock with imminent earnings: Just as uncertainty about earnings can produce elevated options prices before an earnings announcement, uncertainty about tariffs appears to be elevating copper prices. If copper tariffs don’t become a reality, that means one of the catalysts that may have underpinned the recent rally will be removed.

A final note on Wednesday’s options activity in COPX: While the ETF’s shares were trading a little above $43 Wednesday morning, 3,500-contract trades in the April $45 and $50 calls raised the possibility that a large trader was establishing a short-term bull call spread (long the $45 call and short the $50 call). Such a position has the potential to produce a profit (at expiration) if the share price was between the two strike prices, with the maximum gain occurring if the stock closed at the upper strike price.

Market Mover Update: On Tuesday, Soleno Therapeutics’ (SLNO) call options volume was running around 10 times average, while its put volume was roughly 22 times average (see “Volatility heads-up”).

Today’s numbers include (all times ET): durable goods orders (8:30 a.m.), EIA Petroleum Status Report (10:30 a.m.).

Today’s earnings include: Cintas (CTAS), Dollar Tree (DLTR), Paychex (PAYX).

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¹ Bloomberg. US Copper Hits Record High on Tariff Bets, Halted Shipments. 3/25/25.
² CNBC. Trump pledges auto, pharma tariffs in ‘near future,’ sowing more trade confusion. 3/24.25.