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Unique Commodity Indicator Pointing To Rally In Treasury Bonds

By Chris KimbleMarket OverviewMay 19, 2022 01:15PM ET
www.investing.com/analysis/unique-commodity-indicator-pointing-to-rally-in-treasury-bonds-200624584
Unique Commodity Indicator Pointing To Rally In Treasury Bonds
By Chris Kimble   |  May 19, 2022 01:15PM ET
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Higher commodity prices have seeped into everyday costs (food and energy). 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
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!

Unique Commodity Indicator Pointing To Rally In Treasury Bonds
 

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Unique Commodity Indicator Pointing To Rally In Treasury Bonds

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Comments (4)
William Bailey
William Bailey May 20, 2022 1:08AM ET
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Nah, yields gonna shoot up again!! Risk and lack of liquidity ! Thank you Fed for destroying the economy in 13 short years!!! QE to ww3!!
Sidney Glover
Sidney Glover May 19, 2022 6:58PM ET
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which came first? chicken or the egg? investment.com needs to either get better paid writers or stop publishing bs articles. Gold is hedge against inflation and copper is used in most electronic/electric devices. Copper usage and prices have very little to do with gold or inflation. Bond traders and ultra rich don't want interest going up. Higher interest rates help moderate speculation in all assets. low zero rates have caused the crazy stock prices along with housing issues. it's time *****the bubbles up to get normalcy back analysis is flawed and so is the logic
ECL SALES
ECL SALES May 19, 2022 2:19PM ET
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And here copper breaks out!
engineer saleh abo seada
engineer saleh abo seada May 19, 2022 1:30PM ET
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good
 
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