Is the copper price telling what to expect from gold’s price

Copper just “broke out” to its highest level in more than three months…

One of the great investment debates of 2012 revolves around the global economy. On one side, you have folks who believe governments in the US, Europe, and China will be able to “goose” their economies with easy credit and low interest rates. This would support stock, bond, and commodity prices.

On the other side, you have folks who believe a huge recession is in the cards… no matter what governments do to prevent it. This would send stock, bond, and commodity prices lower.

We say consider both sides of the argument and form your own opinion… but always mind the market. The market is the judge, jury, and executioner of any idea. And in this debate, the market is starting to side with the optimists.

The market in this case is the price of copper. Copper is a vital building material that is in nearly everything around you… from plumbing and electronics, to automobiles and appliances. This “in everything” aspect makes the metal rise and fall with global economic activity. Like most every asset, copper sold off hard in late 2011.

But it’s since found a bottom in the low $3 per pound area… and worked its way up to reach its highest level since August. This bit of positive price action is no reason to go dancing in the streets, but it’s a small vote in favor of the optimists’ view.

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