Copper isnât just some industrial input. Itâs the backbone of the modern economy.
The price has gone nowhere for decades. But over that time, it has carved out a massive accumulation pattern that looks ready to explode higher.
This is a trade weâve been preparing for, and it may finally be here.
Gold made its move, and Copper is next đ
As you can see, Gold and Copper futures have traded in tandem for decades.
If one moves, the other isn't far behind.
Gold has been printing fresh all-time highs for over a year.
Meanwhile, Copper is still churning sideways.
We expect this long-term positive correlation to persist, meaning one of these lines is wrong.
We think the red line has been wrong, but it's about to correct itself and catch up to the yellow line.
Copper is testing a key level of interest relative to Goldđ
Copper is retesting the same level that marked the bottom in 2009 and 2020 relative to Gold.
In both cases, Copper went on to dramatically outperform.
Is the same thing about to happen?
The setup is simple... if the ratio holds and starts to reverse higher, we'll have confirmation that the shift from precious to industrial metals is underway.
We're seeing signals of a reversal đ
Copper relative to Gold fell off a cliff earlier this year, plunging more than 20% in just eight trading sessions during late March and early April.
But the ratio has carved out a textbook bearish-to-bullish reversal pattern since that washout. If it resolves higher, we'll have confirmation that the tide is turning in favor of Copper.
For that to happen, we still need one thing... Copper futures must break out in absolute terms.
Here's the setup đ
Copper futures surged 150% off the 2020 lows into the 2021 highs.
Since then, itâs been a multi-year consolidation. A long, grinding reset thatâs carved out a massive base.
Now, that base looks ready to resolve higher.
We want to buy Copper futures on strength above 5.50, with a target of 7 over the coming 2-4 months.
