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I came across this quote from Alfonso De Pablos from All Star Charts:

“Copper vs. gold is a key barometer for risk appetite and economic strength. Every time it’s dropped to these levels over the past 16 years, buyers have stepped in… I can’t think of a more logical place for it to begin outperforming gold than right here.”

I have never really heard much about this ratio before, so I decided to do some of my own analysis. The green line is the ratio of copper to gold. The blue line is copper.

Here is my 5 copper cents worth. There seems to have been a very strong relationship with this ratio in the past; I go back to 1980. It seems this relationship has broken down over the last 5 or so years.

I looked at the relationship with the ratio and gold and couldn’t see anything really. Maybe 5th cousins twice removed.

In summary, the relationship between the copper-to-gold ratio and the copper price has been strong over many decades. Not so much in the last few years. I wish I was as confident as an All-Star, the only logical conclusion I can come to is I have no clue what to make of the idea of copper outperforming gold.

My temperature is back to normal, but there may be some delirium left in the system.

There were so many new ATH yesterday; the one that I think deserves special mention is Bitcoin. Michael Saylor must be as drunk as a sailor on his good fortune. I still think gold is the more responsible play on currency debasement, but Bitcoin cannot be ignored.

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