{"id":674206,"date":"2018-05-05T13:30:17","date_gmt":"2018-05-05T13:30:17","guid":{"rendered":"https:\/\/juniorminingnews.com\/?p=674206"},"modified":"2018-05-05T13:30:17","modified_gmt":"2018-05-05T13:30:17","slug":"how-the-gold-to-copper-ratio-can-make-you-a-smarter-investor-2","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=674206","title":{"rendered":"How the Gold-to-Copper Ratio Can Make You a Smarter Investor"},"content":{"rendered":"
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You’ve heard it for some time now\u2026<\/p>\n

The global economy is finally showing signs of improvement \u2013 especially over the past year or so.<\/p>\n

Most economists and central bankers cite a slew of stats to justify their optimism.<\/p>\n

Nonfarm payrolls\u2026 nominal and real GDP\u2026 consumer confidence surveys\u2026 employment statistics\u2026 the producer price index\u2026<\/p>\n

The list goes on and on.<\/p>\n

I’ll admit: Scouring the endless stream of economic metrics released every other week isn’t an exciting way to spend your downtime.<\/p>\n

Instead, there’s a simple shortcut to tracking the health of the global economy, courtesy of free markets.<\/p>\n

It’s called the gold-to-copper ratio.<\/p>\n

On the surface, gold and copper prices don’t seem to bear a direct relationship to each other. Yet this simple ratio is one of the untold wonders of market analysis.<\/p>\n

Want to know how the global economy is doing? Let this simple indicator do the talking.<\/p>\n

This week’s chart shows the gold-to-copper ratio over the past five years.<\/p>\n

The gold-to-copper ratio tells us how many ounces of copper it takes to buy 1 ounce of gold.<\/p>\n

The less copper it takes to buy an ounce of gold, the lower the ratio. The more copper it takes to buy gold, the higher the ratio.<\/p>\n

But the secret to understanding this ratio is not its current value. What’s much more important is the directional trend of the chart.<\/p>\n

A rising gold-to-copper ratio shows a weakening economy, while a declining ratio shows a strengthening economy.<\/p>\n

Now, judging from the above chart, we see a sharp economic turnaround that began in the middle of 2016.<\/p>\n

The gold-to-copper ratio has been dropping steadily since then\u2026 a simple and reliable sign of a strengthening global economy.<\/p>\n

To be fair, an economy that’s building momentum isn’t the same as an already robust economy.<\/p>\n

There’s still a lot of progress that needs to be made.<\/p>\n

Even still, this simple indicator does tell us that the macro picture is getting brighter for global markets.<\/p>\n

[iu-adbox]<\/p>\n

The Market’s Doom-and-Gloom Indicator<\/p>\n

To really understand the gold-to-copper ratio, you must understand its components.<\/p>\n

Gold is well-known as a safe haven asset. Investors like gold when market pessimism runs high.<\/p>\n

Since gold prices are not intimately tied to stock prices, holding gold can help weather turbulent financial downturns.<\/p>\n

In contrast, investors tend to sell their gold holdings when market optimism is stable and stock gains are red-hot.<\/p>\n

For that reason, I like to think of gold as a doom-and-gloom indicator.<\/p>\n

And if gold is Dr. Doom, then copper is Dr. Boom.<\/p>\n

Copper is not only an important base metal for industrial uses but also a well-known indicator of global economic health.<\/p>\n

Here’s why\u2026<\/p>\n

Copper is used heavily in many sectors of the industrial economy. It’s found in everything from TVs, computers, cars and wristwatches to houses, bridges and roads.<\/p>\n

As a result, the demand for copper \u2013 and other base metals \u2013 reflects whether an economy is growing or slowing.<\/p>\n

As industrial demand for copper rises, prices also rise. That signals a strengthening economy.<\/p>\n

But when demand drops, prices slump. That signals a weakening economy.<\/p>\n

Since copper’s low at the start of 2016, prices have surged as much as 66% \u2013 more than double gold’s \u2026read more<\/a> <\/p>\n

Source:: Investment You<\/a><\/p>\n

The post How the Gold-to-Copper Ratio Can Make You a Smarter Investor<\/a><\/a> appeared first on Junior Mining Analyst<\/a>.<\/p>\n

…read more<\/a> <\/p>\n

From:: Junior Mining Analyst<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

You’ve heard it for some time now\u2026 The global economy is finally showing signs of improvement \u2013 especially over the past year or so. Most economists and central bankers cite a slew of stats to justify their optimism. Nonfarm payrolls\u2026 nominal and real GDP\u2026 consumer confidence surveys\u2026 employment statistics\u2026 the producer price index\u2026 The list […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[371],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/674206"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=674206"}],"version-history":[{"count":0,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/674206\/revisions"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=674206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=674206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=674206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}