Copper:Gold Ratio and TNX 10-Year Treasury Note Yield Weekly Charts

The copper/gold ratio and the 10-year yield are moving in sync. Interestingly, the ratio and the 10-year yield pivot the same time in late 2016. The copper/gold ratio bottoms in spring 2017 but the 10-year yield did not bottom until September 2017. They are still moving in sync only that the copper/gold ratio is leading the yield. The ratio peaks in June 2018 and the 10-year peaks in October 2018. Both of those pivots on the charts are four months difference.

The copper/gold ratio continues trending lower through the red and orange downward-sloping channels. Gold has outperformed copper for the last year except for a week or so last June. As long as the copper/gold ratio trends lower, the expectation would be for the 10-year yield to trend lower.

Remember, lower yields means higher prices for notes and bonds. Traders and investors flee for the safety of notes and bonds in troubled times bidding-up prices which sends yields lower. At the same time, gold outperforms copper in troubled times. In great times, copper leads higher and the ratio trends higher. Copper peaked in late 2017 in relation to gold. The world's economic growth may have peaked a year ago but the Wall Street Einstein's say a recession is nowhere in sight and will not occur until 2020 at the earliest; many say 2021.

Taking the thought process one step further, if the copper/gold ratio would begin trending higher now, it may be four months before yields respond higher. Thus, the 10-year yield may trend sideways to sideways lower for the next four months. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.