Unique Commodity Indicator Pointing To Rally In Treasury Bonds
2022.05.19 20:21
Higher commodity prices have seeped into everyday costs (food and energy), and at the same time, interest rates have also been rising.
That’s a bad combination for everyday America.
But perhaps there is some relief on the horizon-at least in the form of lower interest rates.
Today’s chart looks at the copper/gold price ratio graphed against the 10-year Treasury yield. As you can see, they tend to follow each other directionally.
Copper/Gold Ratio Vs. 10-Year Treasury Yield
The copper/gold ratio has been trading sideways for the past year but looks to be working on a breakdown below support. If this occurs, there is a good chance that bond yields (interest rates) will head lower as well.
Historically speaking, a decline in the copper/gold ratio should be good news for bonds and bad for yields (even short-term). Stay tuned!
