Copper vs Inflation

High Grade Copper has rallied as much as 578% from its low in September 2002 to February 2011.
High Grade Copper price in September 2011, is breaking even with Copper Inflation Adjusted in January 1980
Copper real value from 1980 has been reduced to almost nothing but inflation.
To assess the effect of inflation, see below the
Copper nominal price and Copper inflation adjusted price chart from 1980.                         | Inflation Rate |

Copper inflation adjusted chart -end of month April 2013

Investors who bought Copper in year 1980 are breaking even with inflation adjusted price from 1980.
They had to wait 30 years for this moment.
Many people believe that Copper is good investment. So far they were right. Short term Copper has rallied as much as 578% in the last 9 years.
In low interest rate environment the cost of holding Copper positions in the Market is small.

In high interest rate environment, the cost of holding Copper positions in the Market is rising and investors may start thinking why not selling Copper, deposit money and collecting high interest.

The chart below - US 3 months Bill Rate yield, shows that in 1979 as interest rate got above 8 % P.A.
Copper begin to deflate See chart above.
Would the history of 1980 high price
Copper repeat?

Small percentage of people may still holding Copper because they simply believe Copper is a good investment, but the risk is that they could wait another 30 years to break even with Copper real value or Copper price inflation adjusted.

A Million dollar question. How long Federal Reserve can maintain this low interest rate environment?                                  | US Interest Rate |

Copper Nominal Historical chart - end of month April 2013 

Copper Nominal chart -  end of month April 2013