The copper-gold ratio has hit a new low in about 40 years, which is a typical signal of a global recession. Do not mistake bear market traps for bull market signals. During a downward cycle, steady navigation is key; chasing highs is not advisable. A DCA strategy during dips is the best plan!
Currently, both macroeconomic and geopolitical situations are not very optimistic:
• The Federal Reserve maintains high interest rates, making corporate loans and investments difficult.
• Global manufacturing remains in a sluggish range (PMI mostly below 50).
• The consumer confidence index continues to decline.
• After a valuation adjustment, the U.S. stock market is still at historical highs.
• The conflict between India and Pakistan is escalating, leading to water, air, and trade blockades (Vance visited India, and shortly after, the conflict arose; one can easily guess the reason).
• Iran's largest port, Shahid Rajaee Port, has been bombed and is in a paralyzed state; this port accounts for 85% of Iran's container throughput.
Buffett holds so many Western oil stocks, including those backed by the funding group behind this incident, primarily dominated by energy giants. The situation in the Middle East will only become more complex, and the price of oil is likely to face continuous conflicts, leading to rising crude oil prices and greater profits.
Currently, the copper-gold ratio breaking below is a quite dangerous leading recession signal! Let's wait and see 🧐
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