Copper returned to a buy signal against gold, a historically significant RS shift. We discuss what this might mean doing forwards.
After what was quite a start to 2026 for the precious metals space, gold and silver have continued to cool down as we open up the month of May. The sub asset group had been a previously highflier of the commodities broad asset class before a major blow off top move to close out the opening month of the year…. and while still positive so far in 2026 the space has certainly been one to quickly shed RS against other areas of the investment landscape. Most of the attention has shifted to the energy complex as unrest in the Middle East pushed many energy representatives higher. Meanwhile, precious metals representatives fell by the wayside, seeing the likes of GLD or SLV trading well off their recent highs. While the technical pictures are (at best) still defendable, the recent action has left broader precious metals strength in question. In fact the precious metals group on the Asset Class Group Scores page has fallen significantly. Pictured below, the average precious metals fund comes in with a score of 2.94, now below NDW’s “technically acceptable” 3.0 score threshold. While we don’t think of support or resistance for scores like we would for charts, it is at least conversationally interesting to highlight the series of lower highs when it comes to the groups average score, seemingly unable to re-establish the magnitude of long-term strength after late January’s decline.
As one asset struggles, another can catch up on a relative basis. With the move, other areas of the commodity space have caught up to precious metals. The obvious answer is energy, which quickly moved to the top of commodity rankings as supply shocks pushed energy prices higher across the globe. Outside of the energy space, the magnitude of exhale off 2026 highs also saw precious metal representatives lag behind other areas. A common RS chart the NDW analyst team will look at is that between copper (CPER) and gold (GLD). Using a 3.25% RS chart between these two funds, we can see that CPER returned to a buy signal against GLD to close out April for the first time since 2024. While this 2024 signal ended up being a headfake, the relationship has been fruitful for those following an RS switching strategy (owning whichever asset is on a buy signal) since the early 1990’s. Historically speaking, this RS relationship has also coincided with strong risk-on/risk-off signals, with gold taking over during periods of uncertainty (dotcom bubble, 2008, etc.) and copper leading as a more economically useful metal during times of economic expansion. While this most recent bull market from 2022-present has been led largely by gold, the shift back towards copper points historically that this period of expansion still has room to run.
Even with that shift in mind, it is at least worth journeying back to the default chart for CPER, which has struggled recently. Remember, relative strength charts are just that: relative, meaning a test between two assets which are struggling must still produce a “winning” asset. While still positive for the year, CPER has struggled in the near/intermediate term. Despite trading on a PnF buy signal on its default chart, the recent reversal back into O’s helps confirm a newly established negative trend. While still bringing in a technically acceptable 3.97 fund score, it wouldn’t be a surprise to see the fund head back down towards 2026 lows around $32.50. Also keep in mind that when comparing either copper (or gold for that matter) to other areas of the commodities space via NDW’s continuous commodity matrix the space lacks a significant amount of staying power. All this to say- remember to consider both the absolute and relative pictures when observing assets worth your investment, it can help contextualize shifts in strength between assets around the globe.
