Copper-Gold Ratio No Longer Clean, High Frequency Signal of Market Behavior, ANZ Research Says

While a lower copper-gold ratio indicates economic slowdown, recession fears, and/or risk-off market behavior, the ratio is no longer a clean, high-frequency signal, instead revealing the allocation of capital in the light of the economic future as well as the geopolitical present, ANZ Research said in a report on Tuesday.

Copper rallied nearly 30% over the past three months, but gold jumped 37%. This has seen the copper-gold ratio continue to fall to 2.52, from 3.4 in 2025.

The copper price reflects longer-term demand amid massive investment in an artificial intelligence-powered, electrified, renewables-heavy economy, which will require more copper. Copper also faces ongoing supply-side issues. The global mine output is expected to rise only around 1% in 2026, leaving the market undersupplied by 4% to 5%.

The gold price, on the other hand, reflects the rising geopolitical risks as well as a reassessment of US dominance across the global financial system, including concerns about the independence of the Federal Reserve.

The geopolitical drivers are more prone to sharp corrections, such as the one triggered by the nomination of Kevin Warsh as the chair of the Federal Reserve, which led to gold seeing its biggest slide in four decades. The copper:gold ratio then rose from 2.47 to 2.64 in two days. Gold prices are expected to recover to $5,400 per ounce over the coming months.

Higher geopolitical tensions are expected to keep the risk premium in place in the crude oil market, per the report. While potential supply boosts, such as US President Donald Trump's proposed peace plan or a political transition in Venezuela, could add millions of barrels of oil per day, near-term instability keeps disruption risks high.

A wave of new projects will boost global liquefied natural gas supply by around 10% year-over-year in 2026. Europe leads the demand, replacing falling pipeline flows with LNG, while Asia sees structural gas demand growth from power generation and data center expansion.

Australian Carbon Credit Unit (ACCU) demand is expected to remain resilient due to policy certainty and expectations of tighter baselines past 2030. The ACCU price is expected to trade in the AU$35-per-tonne to AU$40-per-tonne range.

Chinese iron ore demand is set to weaken further in 2026 as steel consumption continues its structural decline, ANZ Research added.