Jefferies maintains the view that copper is trading at an extreme discount when priced in gold, making the probability of a copper-led reversion exceptionally high (Image source: Unsplash) Show Quick Read Summary is AI Generated. Newsroom Reviewed

The copper-to-gold price ratio has fallen to its lowest point in the last five decades, trading more than two standard deviations below its historical mean.

This extreme discount, with copper priced exceptionally cheaply relative to gold, has led Jefferies to note that some degree of mean reversion is inevitable, and the fundamental drivers for this correction are likely to come from the copper side of the equation.

The Extreme Discount and Outlook

Jefferies notes that the ratio of the copper price to the gold price is at a 50-year low.

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