Copper on Tuesday exploded by 4.09% to a new 2-year high of $2.84 per lb, its largest up day in 5 1/2 months. Today’s move in copper is yet more evidence of a collapsing U.S. dollar and soaring price inflation.
NIA has been closely following the copper/gold ratio, which made a major technical breakout on Tuesday – a very bullish sign for the commodities market.
The copper/gold ratio is very closely correlated to the 10-year treasury yield. Along with the copper/gold ratio (times 1,000) rising 0.10 on Tuesday to 2.27, the 10-year treasury yield soared 8 basis points to 2.34%. As the U.S. bond bubble bursts and yields soar higher, copper is likely to outperform gold.