Radar Watch: The Copper/Gold Ratio

We don’t think copper has a Ph.D. in economics but possibly is an ABD

If you are not buying copper hand-over-fist here, at $3.54 per lbs., you should be. We doubt there is enough copper in the world to electrify the transport sector alone.  

According to Jim Paulsen, chief investment strategist at the Leuthold Group:

“The copper/gold ratio is nearing a new high! Undeterred by yet another stock market decline, confidence nonetheless appears to be gaining ground over fear. Is Dr. Copper picking up on something positive coming soon?”

Copper, an ubiquitous metal with wide-ranging uses from construction involving wiring and plumbing to being a key ingredient in the transition to green energy, is typically purchased when investors feel good about the economy. This is why Paulsen calls the reddish-brown metal “Dr. Copper” for its purported Ph.D in economics due to an “uncanny ability to predict global-economic turning points.”  – Bloomberg

Thew sharp increase in electric-vehicle registrations at the start of 2022 meant that the EV share of the overall market in the U.S. hit a historic 4.6 percent. While places like Norway—where over 86 percent of all new vehicle sales were electric in March—may laugh at that number, EV advocates know that change happens slowly, then all at once, or something like that.

Currently, it’s estimated that around 1 percent of the 250 million cars, SUVs, and light-duty trucks on American roads are electric. However, while it’s difficult to estimate future sales, an analysis by IHS Markit projects that 25–30 percent of new car sales could be electric by 2030 and then 40–45 percent by 2035. Using the rates for those projections, Reuters estimates that by 2050 more than half of the vehicles on U.S. roads could be EVs. – Car & Driver

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