Copper/Gold ratio and the inflated macro

The Copper/Gold ratio broke down as expected in 2022

In 2021 we noted for month after uneventful month the most recent consolidation at resistance by the ratio of the copper price (cyclical, inflation sensitive) and the gold price (far less cyclical and less inflation sensitive) and anticipated bearish things to come for the risk ‘on’, inflation-fueled world of assets. Well, check.

The Copper/Gold ratio is now in a multi-month sideways trend after breaking down. If it reclaims lost the red dashed line we can see an extended relief party within the still intact broad bear market. If it starts to head down again that would probably come amid deflationary pressure.

As for the two markets shown below the ratio, I’d expect more downside if the Copper/Gold ratio drops anew. Just a big picture view of something we have not looked at in a while.

copper/gold ratio, copper futures / gold futures

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