Unique Commodities Indicator Pointing To Treasury Bonds Rally

Higher commodity prices have seeped into everyday costs (food and energy), and 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 takes a look at the Copper/Gold price ratio graphed against the 10-year Treasury bond yield. As you can see, they tend to follow each other directionally.

The Copper/Gold ratio has traded 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 if short-term).

(Click on image to enlarge)

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