We often focus on gold, silver or oil trying to understand what will happen to the economy.
Although our cold and rational approach to analysis of the main financial assets, we can not overlook a glance to a raw material that is not very considered by media but is deeply important for the economy: that is to say COPPER.
COPPER is important because it is the basis of almost all the industrial production, it is used singly or as an alloy with other metals.
Therefore a COPPER price increase may be related to a strong increase of the industrial demand and consequently to an economic recovery cycle.
However, since the inter-market relationships do not remain constant for a long time especially in this period, our focus shifts as always on the analysis of the raw material COPPER independently from any further thought.
We show you the chart of the COPPER FUTURES price where the volatility (price change in a time frame) does not miss.
In the chart we drew some colored circles corrisponding with the turning points of COPPER prices.
The COPPER reaches its peak in 1996 (red circle) while the US stock market (and it is believed also the economy) reaches its peak in 2000, when COPPER makes its cycle’s minimum (green circle). The following maximum peak corresponds with the maximum of the economic cycle in 2007 (blue circles) as well as the subsequent minimum in 2009 (purple circle).
During the two following years we find a maximum cycle again (yellow circle) while nowadays, we notice a minimum of COPPER with the US market on maximum (black circle), one of the them is lying!