Courtesy of Chris Kimble
The Doc Copper/Gold ratio broke above a 2-year falling channel back in 2016 at (1). Following this breakout, it rallied for the next year. During that year, Copper related assets did very well!
The ratio peaked in the summer of 2018 and created a series of lower highs over the past two years.
The strength of late has the ratio attempting to break above dual resistance at (2).
If the ratio continues to push higher and succeeds in breaking out, Copper, Basic Materials (XLB), and Freeport (FCX), should experience nice upside action!
Bonds would most likely get nervous if this ratio continues to plow higher. If the ratio does remain strong, TLT should perform poorly and TBF should do very well!
An important long-term resistance test is in play currently. What this metals ratio does in the next couple of months, will send an important macro message to the markets!
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