Copper/gold ratio (12-month change)
Copper vs gold. Market fear and the dollar.
Updated
What is it?
Compares copper (used in industry) with gold (bought out of fear) and looks at how that has changed over a year.
12-month change in the copper/gold ratio. Sharp falls indicate that the safe haven (gold) is gaining ground on industrial demand (copper).
Why does it matter?
If gold gains a lot on copper, investors prefer to seek safety rather than bet on growth.
When should it be a concern?
It is a concern when investors are fleeing to gold. Crisis Monitor turns each reading into a score from 0 to 100 using these bands:
| Situation | Value | What does it mean? |
|---|---|---|
| Calm | ≥ 0.0% | Score 0: no stress |
| Watch | ≤ -12.0% | Score 33: starts to draw attention |
| Stress | ≤ -25.0% | Score 66: risk zone |
| Extreme | ≤ -45.0% | Score 100: like in the worst crises |
Between one band and the next, the score is interpolated.
Copper/gold ratio (12-month change) in past crises
Since August 2001, its weekly low was -64.8% (Feb 2009) and its high was 112.1% (Feb 2010). The typical level (the median) is -5.0%.
| Crisis | At the start | Low during the crisis |
|---|---|---|
| Dot-com bubble and 2001 recession | — | -35.1% (Oct 2001) |
| Global Financial Crisis 2007-09 | -15.6% | -64.8% (Feb 2009) |
| European debt crisis 2011 | -5.3% | -30.7% (Sep 2011) |
| 2015-16 market scare | -1.5% | -24.7% (Nov 2015) |
| Q4 2018 sell-off | -0.8% | -15.2% (Dec 2018) |
| COVID panic 2020 | -22.6% | -42.5% (Apr 2020) |
| 2022 bear market | 31.4% | -21.8% (Oct 2022) |
Weekly data. Crises that do not appear predate the series.
How does Crisis Monitor use it?
- Area: Markets, currency and safe havens (15% of the index). Fear in the stock market, the strength of the dollar and whether investors are rushing to safe havens.
- When does it move? Usually warns early.
- Data frequency: daily.
- Quick alarm: No.
The index combines 17 indicators. See the methodology to learn how it is calculated.
Data source
Own calculation: copper (HG=F) ÷ gold (GC=F), 12-month change. Data may arrive late and does not constitute financial advice.
Frequently asked questions
What is the copper/gold ratio?
It divides the price of copper, tied to industry, by that of gold, the classic safe haven. If it falls, fear is gaining ground over economic activity.
Why is its 12-month change measured?
Because the level of the ratio changes a lot with commodity cycles. The one-year fall better reflects a sharp swing toward safety.