Doctor Copper: Finally the breakdown?

As the Copper price finally makes a move that could lead to implosion (this time?)

It’s a hard break below the SMA 200 and maybe this time the good doctor will prescribe a counter-cycle.

Not so curiously, gold is getting blown up this morning (not quite yet to our downside targets) but oh wait, look at the old monetary man vs. the inflated economic doctor. If the forces of counter-cyclicality are going to finally make a move, now would be as good a time as any.

If you’ve been reading this site and especially NFTRH over the last few months, you know my preference (painful though it will be) and you know what I favor.

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4 thoughts on “Doctor Copper: Finally the breakdown?

  1. I have not read 703 yet but the Gold/Oil ratio is breaking down today and also recently. And the oil market is ca 5 times larger all other commodities combined. Why the preference for the Gold/Copper ratio?

    1. Simply because I am viewing the wider macro, not just a specific commodity (oil) with discrete fundamentals as pertains to gold mining. In other words, to get a general read on the global cycle a purely cyclical metal vs. a much less cyclical metal gives (IMO) a better signal. Gold stock obsessives would want to stay on the Gold/Oil ratio, but wider macro watchers, esp. as pertains to cyclical inflation, would be interested in Au/Cu.

      1. I would like to think that oil is as good a gauge of cyclical inflation as copper? Oil has a broader use than copper and the s&d response is faster than for copper. Gold relative CRB would be the best choice since the s&d of all commodities are evened out.

        I see the point in comparing two metals, but I also assume that the cost of diesel would be at least equal or even a larger cost for a copper miner than a gold miner, which can be high grade undergound. Cu/Oil is really breaking down.

  2. I agree on Au/CRB, which is still way down in the dumps driven as it has been by energy commodities lately. It’s better than oil for macro measurement. But again, I am leaving all miner considerations (Au, Cu or otherwise) out of the equation when trying to take a top down macro view.

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