Copper is the only extreme I can find

The only “extreme” I am finding amongst the macro cross-asset world is in the rising price of Copper.

Accordingly to my analysis, the price of Copper ($2.86) remains at extended and extreme levels and start to decline.

The traders amongst us may choose to take a “short” position, while others may ponder who will be the beneficiaries of lower Copper prices.

Although not at an extremes, a new trend is developing suggesting lower yields for the U.S. 10 Year Government Bond.

And so, I want to bring to your attention the wonderful correlation the Copper to Gold Ratio has compared to the U.S. 10 Year Treasury Yield.

In the past 2 weeks, the metals ratio is diverging and moving in the opposite direction. I believe this ratio will mimic the bond markets pattern soon and with a new trend suggesting lower yields in the 10 Year, this means either Gold falls at either a proportionate rate or greater than my predicted decline in the Copper price.

10 July 2020
by Rob Zdravevski
rob@karriasset.com.au

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