The gold-to-copper ratio compares a safe-haven precious metal (gold) with copper, the most economically sensitive industrial base metal. Known as 'Dr. Copper' for its ability to predict economic trends, this ratio serves as a key economic indicator.
Why is this ratio important?
A rising gold/copper ratio suggests investors are favoring safe-haven assets over industrial commodities, often signaling economic uncertainty or recession fears. A falling ratio indicates optimism about economic growth and industrial demand. Many economists and traders consider this ratio a leading indicator for economic cycles, often anticipating market moves.