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If the path to safety from economic and stock market instability has been paved with gold, the road to revival may well be paved with copper .

While gold's rally to record prices has grabbed most of the headlines, copper has more quietly been putting together an impressive run of its own. Because the industrial metal has long been held up as a reliable advance indicator of economic and market fortunes, confidence is growing that we are on the cusp of a rebound in demand for critical raw materials - a precursor to a broader recovery in consumer demand and economic growth that will provide the fuel for an upward cycle in stock prices.

"If demand for copper is growing, the world economy must be growing as well," Brockhouse Cooper strategists Pierre Lapointe and Alex Bellefleur said in a report Wednesday - the same day copper hit a 27-month high of $3.79 (U.S.) a pound in New York, extending a rally that has added almost 30 per cent to the price in less than three months.

"Given the recent worries about the health of the global recovery, this should be positive for stocks - especially given that stocks do not appear to have benefited to the same extent as copper," they added.

During much of that the same period stock markets were largely preoccupied with doubts about the prospects for economic growth. North American markets have rebounded about 12 per cent in the past three months, but the bulk of that has come since late August.

That lag between copper's rally and the stock market's upturn is seen by some as another case of the historical trend of equities following the early lead of copper - which has a reputation as a bellwether for economic health because of its wide use in so many segments of the economy, from electronics and communications to home and commercial construction to transportation and machinery.

Copper's strength as an economic predictor is so strong that it is known in many market circles by the nickname "Doctor Copper" - the common line being that it is the only commodity with a PhD in economics.

"Historically, copper has been a good leading indicator," said David Fingold, vice-president and portfolio manager at wealth management firm Dynamic Funds. "The copper intensity of the global economy remains strong."

Given that turnarounds in the stock market often precede and predict similar moves in the economy, the fact that stocks have begun to play catch-up with copper is seen by some observers as a bullish signal for economic improvement in 2011.

What has set copper off, many experts believe, is a rebound in demand from China, by far the world's biggest consumer of the metal. China's copper imports have been on a generally rising trend for the past year, spurred by stronger-than-expected improvement in industrial production (up almost 14 per cent year-over-year in August, the most recent figures available). Other fast-growing emerging economies have followed suit - contributing to a slide in copper inventories throughout the year, reducing them to 11-month lows.

Still, there are plenty of doubters who suggest that the real driver behind copper's rally hasn't been recovering demand, but rather anticipation that the U.S. Federal Reserve Board will institute another round of quantitative easing - a form of unconventional easing of monetary policy that involves direct injections of money supply into the system in order to stimulate the flow of money. Because further easing by the Fed would weaken the U.S. dollar, and because copper and other commodities are priced globally in the U.S. currency, many experts feel this is feeding the rally in copper and other metals, rather than expectations of demand growth.

"Devaluation of the dollar is going to lead to inflationary times and decreasing purchasing power," Adam Klopfenstein, a senior market strategist at derivatives brokerage firm Lind-Waldock in Chicago, told Bloomberg News on Wednesday. "This thought process is going to prop up commodity prices."

But Mr. Fingold said that even if quantitative easing is the catalyst, it doesn't really matter - the turnaround in copper and equities may still be a bullish for the economy.

"If copper and the stock market are both leading indicators, and if the printing of money [by the Fed]is good for liquidity and good for the economy, then [a rally triggered by quantitative easing]is a real, positive indicator," he said, noting that anything that pushes up the stock market improves investors' net worth, which ultimately fuels consumer demand.

"It can become economic reality."

Year-to-date performance:

• Copper+27%
• Aluminum+19%
• Nickel+31%
• Gold+13%
• Oil+16%
• S&P 500+13%
• S&P/TSX composite+12%
• U.S. dollar*-8%

*measured against a weighted basket of leading global currencies

CANADIAN COPPER PRODUCERS

Some prominent Canadian mining names that are significant copper producers, and their year-to-date stock performance:

Teck Resources+21%

Inmet Mining-6%

Quadra FNX Mining+4%

HudBay Minerals+14%