June 28, 2022 16:04 GMT
The ratio of copper to gold prices in notably continues to point lower (despite a tepid bounce in copper over the past few days), following a break lower in Gold's favor from its range which began in February 2021.
- This ratio is reflecting weakness in global manufacturing sectors, which judging from recent survey data look likely to enter contraction in H2 2022.
- Peaks and troughs in the Netherlands CPB's aggregate of global industrial output (for which data is available only through April, see below) have largely corresponded with similar moves in copper-gold.
- With the latter clearly rolling over, it would not be a surprise to see global IP turning negative Y/Y, reflecting weakness in the European (Ukraine war/energy price related) and Chinese (Covid lockdown) productive sectors in particular, though the recent PMI readings suggest the US is hardly immune from global pressures.
Source: CPB, BBG, MNI
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