Chart of the Day - Thursday, May 11, 2023

Today’s Chart of the Day was shared by Adam Turnquist (@adam_turnquist). It's a chart of the Copper/Gold ratio (top) and the US 10-year Treasury Yield (bottom). The Copper/Gold ratio dropped to its lowest level in more than a year today. Copper is a risk-on metal that typically moves higher during periods of economic growth. On the other hand, Gold is a risk-off metal that often thrives during economic uncertainty. As Adam points out, new lows from the Copper/Gold are a potential warning sign for stocks and the economy. Also, this ratio is highly correlated to the 10-year yield, as shown in the lower panel. The 10-year yield has been holding support around 3.25% for most of 2023. However, the Copper/Gold ratio is hinting that yields will resolve lower.