Stock Market Bulls Hope Copper/Gold Ratio Holds Support!

Macro indicators can help investors better understand what’s happening within the broader economy. And this often spills over into the stock market.

The Copper/Gold ratio is one such indicator. And it’s near an important crossroads.

In the chart below, you can see that the Copper/Gold ratio has been in a downtrend since early 2018. And this ratio and interest rates are also correlated – note the big downturn in interest rates over the past year.

When this ratio (and interest rates) are falling, that’s typically not a good sign for the economy and stock market. And after the bearish reversal lower at (1) in the chart below, the ratio (and rates) fell sharply.

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Bulls clearly would like to see this ratio turn higher (along with interest rates). And they’ll get their chance – the Copper/Gold ratio is currently testing an important dual-support area represented by lateral support and the lower line of its downtrend channel at (2).

I suspect stock bulls would receive a concerning price message if support breaks at (2) and the ratio heads lower. Stay tuned!

Copper / Gold Ratio “weekly” Chart

copper gold price ratio correlation to interest rates chart image investing news - june 12

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Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.