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Is Copper Leading Gold?

08/02/2017 2:53 am EST


Omar Ayales

Editor, Gold Charts R Us

Is copper leading gold up? Copper recently jumped up to a 2+ year high while gold and silver continue their rise, explains resource expert Omar Ayales, editor and chief trading strategist for Gold Charts R Us.

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The resource sector is starting to bubble while gold is at the onset of an intermediate rise. Gold and copper haven't been seen as two metals that have similarities in recent years.

The precious metals and resource sectors (which these two metals represent) will normally move together during a strong clear bull market.

Since the last two years have been turnaround years, there wasn't a clear relationship. But it's starting to mesh which is why I've chosen the graph below as our Chart of the Week.


One key similarity is that they both bottomed in Dec 2015-Jan 2016, and have been in an uptrend since then, see blue uptrend.

Copper didn't rise with gold last year, but it lead gold in this year's rise as it shot up from its October lows. And copper may now be leading once again. And especially so because gold's next step is an intermediate rise we call C.

Meanwhile, gold shares are holding but struggling to rise. They're still forming a major bottom, and they're holding above key supports.

Both copper and gold are in bull markets above their key moving averages shown on the chart. Once gold rises above $1300, it'll be following copper. Our strategy for this week is to watch the resource sector. We're ready to buy some.

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