So how does this one work?
Pretty simple: You divide the dollars-per-ounce price of gold by the cents-per-pound price of copper. As a simple example, if gold is selling at $1400/oz and copper is at $4.00/lb, the gold:copper ratio will show 3.5. In other words, if that line starts moving up, it means gold is doing better in relative terms to copper. If it moves down, vice versa.
The interesting thing for your humble scribe is the bit over at the left of the chart, though. Pre-08Crisis that Gold/Copper ratio stood at 2.5X. As we’ve recently seen silver move back down from the 60X and 65X levels it had been running with gold to the 50X (and lower) levels it traded at pre-crisis, maybe copper will now follow suit and trade at a higher ratio to gold..
Or maybe not….
You be the judge.