There is an old saying, called "Coal flying and colors dancing,"

which means that energy prices rise first, followed by a rise in non-ferrous metals. Because energy price increases are the root cause; once energy costs rise, smelting costs quickly follow. Then, demand for new energy sources like wind, solar, hydropower, and energy storage batteries that hedge against thermal power costs will also expand, meaning the demand for non-ferrous metals will also increase. Rising supply costs plus expanding demand will lead to significant gains in non-ferrous metals.

This round of silver and copper prices soaring did not wait for energy prices to rise first before skyrocketing. This can actually be linked to another interesting story.

Gold, silver, and copper are all traditional currencies, but unlike fiat currencies today which can be printed at will, their valuation was different. Compared to the rampant growth of M2, if gold, silver, and copper still had currency-like functions, their exchange rates against fiat should have risen, not stagnated for ten or twenty years. But at that time, big players like Goldman Sachs and Morgan Stanley came out and said that gold, silver, and copper are just industrial raw materials, no longer currencies and do not serve as stores of value. They even stopped making jewelry with 24k gold and switched to 18k gold and 925 silver. The appreciation of diamonds and sapphires outpaced gold, silver, and copper for many years. Then, Wall Street presented charts showing industrial consumption, reserves, and annual mining volumes of gold, silver, and copper, concluding that supply exceeded demand. As people gradually believed that gold, silver, and copper are primarily industrial raw materials, gold only rose once every ten years, silver once every twenty years. Copper's reserves are indeed limited, which explains why its price has risen relatively frequently.

Today, central banks’ massive gold purchases have spurred retail investors to reconsider silver and copper, trying to re-establish their valuation. But in reality, we should be cautious. Who knows if Wall Street will come out again and say, "Although gold can store value, silver and copper are still just industrial raw materials," and then trap everyone for another ten years.

The reason I mention this today is because it reminds me that silver and copper are essentially the “knockoff” alts of gold. ETH, as an altcoin to BTC, has been underperforming BTC’s recent rallies because ETH is being priced as a tech stock, while BTC continues to promote the narrative of gold, serving as a means of value storage.

Once something is positioned as a means of value storage, its demand can be unlimited, with no apparent ceiling. If it is defined as an industrial raw material, then supply and demand analysis is necessary; if it's regarded as a tech stock, then whether it has the potential for large-scale adoption must be evaluated.