Excell with Options: Examining Opportunities in Aluminum & Copper
Report highlights
The current narrative around the U.S. economy is focused on a soft landing and rate cuts. Rich Excell looks at whether or not aluminum and copper, as well as the spread between them, tells a different story about the global economy's health.
Image 1: Aluminum price in terms of gold and copper price
I have two charts up on my computer that I routinely go through. I learned early in my career that the best traders, even outside of the commodity complex, like to look at these industrial metals (ALE1 and HG1) priced in terms of gold (GC1) in order to take the FX effects out of the price. Thus, a trader might be able to ascertain a solid view of the commodities market’s sense for supply and demand. Since May, as both of these measures have shown extreme weakness, it has led to a number of commentators wondering if the global economy is entering into a period of meaningful economic slowdown.