Champagne, Copper, and the $5,000 Gold Ounce
- Anna Dalaire
- 1 day ago
- 7 min read
Updated: 1 day ago
"Can you teach me the stock market?"
My friend pushed her champagne glass aside. We were at a busy lounge, celebrating her promotion, but her mind was clearly elsewhere.
"Everyone is talking about gold," she continued. "It’s over $5,000 an ounce. Am I too late? Where do I even start?"
I laughed. "Look, I still have a lot to learn about the market myself."
"And I definitely can't teach you everything over one drink, or even one bottle."
"But I can explain the basics: why your dollar is diluting, why gold is vertical, and how to better position yourself."
Here is the 5-minute lesson I gave her.
Part 1: The Money (Why the Price is Up)
"First, you have to understand why gold is $5,000 and it comes down to two things: Dilution and Fear."
1. The Dilution (The Watered-Down Drink) I pointed to her glass. "Imagine if the bartender poured a cup of tap water into your champagne right now." "Would you have more champs? No. You’d have a weaker drink."
That is exactly what the US and Canada did to our currencies.
2008: The US printed billions to save the banks.
2020: The US and Canada went "vertical," increasing the money supply by nearly 27% in just 18 months to survive the pandemic.
The Result: Your dollar is diluted. It takes more of them to buy the same "real" assets, like gold, copper, or land. The gold didn't change; the money just got weaker.
2. The Fear (The Geopolitics): “But it’s not just printing,” I added. “Big money is seeking safety. Now that tariffs and sanctions have weaponized the dollar, and with trade wars escalating globally, uncertainty is the only certainty left. This has driven Central Banks to buy record amounts of gold. They are dumping paper for metal because gold is the only asset that isn’t someone else’s liability.”
I took a sip to let that sink in. “Now, look, if world peace breaks out tomorrow or interest rates stay sky-high forever, gold could take a hit. It’s not a straight line up. But given the debt and the chaos, the trend is clear.”
Part 2: Dr. Copper (The Nervous System)
"But it's not just about protection," I said. "It's about the future. Do you believe in the future of AI? Do you believe in Green Energy?"
"Copper prices have been in an upward trajectory, hitting ~$5.92/lb, up nearly 35% over the past year. This is the world realizing we don't have enough wire to build the future."
The Simple Truth:
AI Data Centers? They are copper beasts. A single data center can consume 27 tonnes of copper per megawatt of power capacity. With AI power demand projected to jump 165% by 2030, that is a lot of metal.
Electric Vehicles? An average EV uses roughly 183 lbs (83 kg) of copper, compared to just 48 lbs for a gas car. That is nearly 4x more metal for every car on the road.
The Power Grid? It’s the biggest bottleneck. To meet climate goals, the world needs to spend over $600 billion annually on grid upgrades.
"If you believe in AI or Green Energy, you have to believe in Copper," I told her. "Because there is no Plan B, there is no replacement for copper wire."
👉 Want to see exactly how much copper you use before 9 AM? Read The Invisible Web of Copper: A Day in the Life to see how this metal powers everything from your alarm clock to your Uber.
Part 3: The Supply (Why We Can't Fix It)
"Okay, I get it," she said. "We need more gold and copper. And I assume we need more nickel and cobalt too? So why don't we just dig more?"
"Because it's not that simple," I answered. "It’s not just about digging. It’s about finding, permitting, and where the metal actually lives."
This is the part many investors miss. We are facing a Supply Cliff.
1) The Discovery Void (We Can't Find It): For years, there was a massive deficit in exploration spending. We stopped looking, and now the cupboards are bare. The days of easily stumbling into massive "Tier 1" or "Tier 2" deposits are over. To make matters worse, the mines currently in production are in decline, with reserves shrinking every year.
2) The Red Tape (The 16-Year Wait): Finding the metal is just the start. A Junior explorer has to make the discovery, prove it out, and then often cut a deal with a Major mining company to build it. That transaction alone takes time.
Then comes the real bottleneck: Permitting. Whether it involves environmental studies, indigenous consultation, or government access rights, the rules vary by country but the result is the same. It now takes an average of 16–20 years to navigate this bureaucratic maze. A discovery made today likely won't become a mine until 2045.
3) The Location Problem (Geopolitics): Even if we find it and permit it, we have to keep it. Over half of the world's critical minerals sit in just a handful of countries. In 2023, Panama, one of the world's largest copper mines, was forced to shut down due to government and public pressure, erasing a huge supply from the market overnight. Whether it's a tax hike in Africa or a protest in South America, if a political border closes, that metal effectively vanishes.
The Reality: Demand is vertical (Fear + AI), but supply is stuck in a bottleneck of red tape and geopolitical risk. That is why prices are soaring. It’s a scarcity signal.
Part 4: The Menu (How to Invest)
"Okay, I get the concept," she said. "But how do I actually invest? Do I buy physical gold? How do I choose a stock?"
"It depends on your appetite," I said while opening the menu. "You need to know your investment goals and your risk tolerance."
I pointed to the different sections. "Think of it like a three-course meal."
Appetizer: The Physical (Safe Haven) 🛡️
What it is: Buying actual coins, bars, or an ETF that tracks the price.
The Goal: Wealth Preservation.
The Risk: Low.
The Reward: If gold goes up 10%, you make 10%. You won't get rich, but you won't go broke.
Main Course: The Majors (Steady Pay) 🏢
What it is: Buying the giants (e.g., Barrick, Agnico Eagle, Freeport).
The Goal: Income & Growth.
The Analogy: Like owning an apartment building. You get "rent" (dividends) every quarter, and if the neighborhood heats up (the gold price rises), the building's value goes up.
The Play: Safe exposure with a steady paycheck.
Dessert: The Juniors (The "Bucky" Zone) 🚀
What it is: Exploration companies. They don't have a mine; they have a drill rig and a map.
The Goal: Wealth Creation.
The Analogy: Like backing a startup. You are buying a piece of the company at its earliest, riskiest stage in hopes of a massive payout later.
The Risk: High. The potential of them finding nothing is real. If they fail, the stock can go to zero, and you can lose your entire investment.
The Reward: Leverage. You aren't just chasing a 10% gain. If a Junior makes a discovery or partners with a Major, you can see returns of 5x to 20x (or even more) on your initial share price.
Why Now? With gold and copper at all-time highs and Majors' production rates down, the big companies are desperate. They have spent a decade under-investing, and their pipelines are empty. They need the Juniors to find the next generation of mines. We are entering a cycle in which the big fish must feed on the little fish to survive.
The Toast
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