Today is Sat, August 19, 2017 20:29:40 GMT
RSS Follow Us Follow us on Twitter Friend us on Facebook
Contributors Copper Gives Us a Picture of the Global Economy
The Top Gold Stock of 2012

This grossly undervalued gold miner is set to surge in the coming months. Learn more in our free report.

Enter your Email Address Here:

Privacy Policy
Sovereign Investor FAQ

When I want to know what the global economy is doing, I don’t rely exclusively upon GDP data. GDP data looks in the rear-view mirror to tell you where you’re going. I’ve just never liked making investing or trading decisions based off of old information like that.

So what do I do? I look to commodities … and one in particular: copper.

Copper is one of the most widely used commodities out there. It’s used in residential and commercial real estate, electronics and automobiles – and much more. It’s everywhere.

So when I want to see how the global economy is doing, I let copper answer that question for me.

If copper is heading higher, it’s because the global economy is growing and placing more demand upon the limited supplies of copper. However, if the global economy is slowing, then the price of copper drops due to a lack of demand.

So, copper heading up means global growth, and copper heading downward means global slowdown. It’s that simple.

With that in mind, let’s take a look at the daily, two-year chart of copper below:

Copper Has Been Rising Since Last October

See larger image

We’re experiencing global growth … not “raging” growth, but growth nonetheless. How do I know? Copper bottomed in October of last year and it’s been heading higher overall ever since.

In fact, you can see that it made a higher low, as noted by the green arc during the summer months being higher than that of the lows of last winter. That tells us that demand is higher than what it was before, so it comes in and supports copper at a higher price.

But there’s more: Copper has also broken its red downtrend line too. That’s another sign that global growth continues.

Just the knowledge that global growth exists has kept me on the right side of the trade, which is to be a buyer of risk-on assets rather than defensive assets.

So the next time you’re wondering how the economy is doing or how you should be investing or trading … first look to copper to see what it’s doing.

Have a nice day!


Sean Hyman

Recent posts by forexnews