Indicator Overview

The Copper to Gold Ratio is a popular macro indicator, often used as a barometer for global economic health and inflation expectations. Copper ("Dr. Copper") is seen as a risk-on, growth-sensitive asset, while Gold is typically considered a risk-off, safe-haven asset.

How To Use

This ratio is a widely followed measure of economic sentiment and inflation expectations.

1. High/Rising Ratio (Copper Outperforms Gold): This typically indicates a Risk-On environment.

• Economic View: Traders expect stronger global economic growth (since copper is essential for construction and manufacturing).

• Inflation View: May suggest higher inflation expectations (demand-driven commodity prices rising).

• Interpretation: Suggests favorable conditions for growth-sensitive assets like equities and cyclical commodities.

2. Low/Falling Ratio (Gold Outperforms Copper): This typically indicates a Risk-Off environment.

• Economic View: Traders expect an economic slowdown or recession(lower demand for industrial metals).

• Interpretation: Suggests a flight to safety, favouring assets like bonds and potentially certain defensive stocks.