The Copper/Gold Switch
CommoditiesOn the first trading day of each month, compare the copper/gold ratio (CPER divided by GLD) with its level three months earlier. If the ratio has RISEN — copper outperforming gold, the classic signal that growth expectations are improving — hold SPY for the month. If it has fallen, hold TLT (20+ year Treasuries) instead. Benchmark is a 60/40 SPY/TLT portfolio rebalanced each January.
See this in the terminal — live earnings bands, fair value and rates.
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Copper beating gold said 'growth'. Following that signal beat the balanced portfolio.
The rule. On the first trading day of each month, compare the copper/gold ratio (CPER divided by GLD) with its level three months earlier. If the ratio has RISEN — copper outperforming gold, the classic signal that growth expectations are improving — hold SPY for the month. If it has fallen, hold TLT (20+ year Treasuries) instead. Benchmark is a 60/40 SPY/TLT portfolio rebalanced each January.
What actually happened.
- $10,000 became $16,782. The same $10,000 in 60/40 (SPY/TLT) became $14,303. This strategy beat the benchmark by $2,478.
- Compounded at 3.6% a year vs 2.5% for the benchmark.
- Best year: 2021 (+32%). Worst year: 2022 (-29%). This is not a smooth ride.
The catch. At its worst, this strategy fell -45% from a prior peak — deeper than the benchmark's -6%. Would you have held through that? Most people don't. That's the whole game.
The takeaway. It worked here — but "it worked in the past" is the most expensive sentence in investing. The edge is real only if it survives costs, taxes, and the drawdown above. Show your work, then decide.
Holding right now (2026-09-01): SPY.
Drawdown from prior peak
Calendar-year returns
| Line | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Copper/gold switch (SPY or TLT) | -7% | +15% | +12% | -3% | +15% | +16% | +4% | +8% | -3% | +32% | -29% | +10% | -0% | -6% | +3% |
| 60/40 (SPY/TLT) | +7% | +14% | +19% | 0% | -0% | -0% | -0% | -0% | -0% | -0% | -0% | -0% | -0% | -0% | -0% |
Holding now · 2026-09-01
CPER launched in 2011, so this window is shorter than the site's usual fifteen years — and it contains only two real growth scares, which is a small sample for a macro rule. How we test
Rebalance: monthly (first trading day), all in SPY or all in TLT · Window: 2012-02-15 → 2026-09-02 · Last run Sep 2, 2026 · JSON