Precious metals and industrial metals have been headed in opposite directions lately. Throughout 2021, industrial metals have been in a steady uptrend with Bloomberg’s Industrial Metal Index up as much as 38% at its highs in mid-October. Since then, the group of commodities has been pulling back and are now at the bottom of the past year’s uptrend. Currently, industrial metals are now down to a 22.4% gain on the year. Meanwhile, precious metals have been an underperformer all year, spending the vast majority of 2021 in the red year to date. Since September 29th, though, precious metals put in a low and have rallied 7.7% whereas industrial metals are essentially flat in the same span of time.

Given the inverse moves in industrial and precious metals, the relative strength line between the two has seen its trend falter. As shown below, since late summer 2020, industrial metals continuously outperformed precious metals as seen through the uptrend in the relative strength line. Last month, the line even broke out above the prior high set in June 2018. The sharp decline since then has resulted in a break of the aforementioned uptrend.