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 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 if short-term). Stay tuned!