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Something's Got To Give - Gold, Bonds or Copper


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#1 Douglas

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Posted 30 July 2021 - 04:56 AM

For several years, a plot of copper divided by gold correlated well with the 10 year treasury yield ($TNX), that is until something this spring

turned over the apple cart.  Sooner or later you'd think this correlation would return to normal which requires gold to rise or copper to fall or interest rates to rise or maybe a little bit of all of them.  Given the FED's jackboot on the throat of rates, it's probably going to be up to the metals to sort this out.  Any brave souls out there long gold and short copper?

 

B65Vs4q.png

 

Today is a risk window, but my preliminary look at next week shows Monday as one too, possibly as a pair with today, so this window might be a little wider than just today. 

 

Regards,

Douglas


Edited by Douglas, 30 July 2021 - 05:01 AM.


#2 Rogerdodger

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Posted 31 July 2021 - 09:58 AM

Sounds like a reasonable spread....

 

Major housing boom is underway for various reasons.

Covid actually may be responsible!

The paint counter at Home Depot last year was swamped.

No one could go to work or school so they got the old house ready to sell.

Within days, if not hours the older houses would sell and sellers were buying new homes.

 

Need lots of copper for wiring & appliances for new homes.

This too shall pass and seems to be slowing as housing prices have skyrocketed.

My grandaughter signed a contract for a new home in February,,,they have not even started the groundwork yet and the current contract price has gone up $50,000!

 

 

Housing boom is over as new home sales fall to pandemic low

Published Mon, Jul 26 2021

  • Sales of new single family homes fell to an annualized rate of 676,000, 6.6% below May’s rate of 724,000 and 19.4% below the June 2020 level of 839,000.
  • The median price of a newly built home in June rose just 6% from June 2020
  • The inventory of new homes for sale jumped from a 5.5-month supply in May to a 6.3-month supply in June. Last fall, it sat at a low of just 3.5 months.

Edited by Rogerdodger, 31 July 2021 - 10:45 AM.


#3 Douglas

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Posted 31 July 2021 - 11:09 AM

Rodgerdodger, the EV market and housing boom probably distorted the copper prices and consequently the copper/gold and 10 year yield correlation.  If as you noted  the housing boom is cooling in the US due to high prices, it should help reset the correlation, but only partially if the EV conversion is still going strong.   With housing and EV's distorting the copper prices and the FED distorting interest rates, maybe this correlation is kaput for the foreseeable future.   That's just typical of my luck.  I find a good market indicator and as soon as I start using it, it stops working.  If it weren't for bad luck, I'd have no luck at all.

 

Regards,

Douglas 



#4 Rogerdodger

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Posted 31 July 2021 - 01:11 PM

Douglas, you shoulda bought another house 2 years ago...When I sold one ...before the price spiked another $50K !  cry.gif

At least my tax bill wasn't as high at that lower price... dunce.gif


Edited by Rogerdodger, 31 July 2021 - 01:13 PM.


#5 slupert

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Posted 02 August 2021 - 01:33 PM

For several years, a plot of copper divided by gold correlated well with the 10 year treasury yield ($TNX), that is until something this spring

turned over the apple cart.  Sooner or later you'd think this correlation would return to normal which requires gold to rise or copper to fall or interest rates to rise or maybe a little bit of all of them.  Given the FED's jackboot on the throat of rates, it's probably going to be up to the metals to sort this out.  Any brave souls out there long gold and short copper?

 

B65Vs4q.png

 

Today is a risk window, but my preliminary look at next week shows Monday as one too, possibly as a pair with today, so this window might be a little wider than just today. 

 

Regards,

Douglas

your inbox says you are not accepting messages and I have been trying to contact Mark since Friday with no response, is something wrong? 



#6 slupert

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Posted 02 August 2021 - 01:34 PM

 

For several years, a plot of copper divided by gold correlated well with the 10 year treasury yield ($TNX), that is until something this spring

turned over the apple cart.  Sooner or later you'd think this correlation would return to normal which requires gold to rise or copper to fall or interest rates to rise or maybe a little bit of all of them.  Given the FED's jackboot on the throat of rates, it's probably going to be up to the metals to sort this out.  Any brave souls out there long gold and short copper?

 

B65Vs4q.png

 

Today is a risk window, but my preliminary look at next week shows Monday as one too, possibly as a pair with today, so this window might be a little wider than just today. 

 

Regards,

Douglas

your inbox says you are not accepting messages and I have been trying to contact Mark since Friday with no response, is something wrong? 

 

oops meant that to go to Rodgerdodger.