Jefferies: Copper-to-gold ratio falls to 50-year low, expects copper prices to lead the rebound.

Jin10 data reported on October 31, the ratio of copper prices to gold prices has fallen to its lowest level in the past fifty years, currently over two standard deviations below its historical average. Given that copper is relatively cheap compared to gold prices, Jefferies believes that a certain degree of mean reversion is inevitable, with the fundamental driving force behind this correction expected to mainly come from the copper price side. Jefferies pointed out that the ratio of copper prices to gold prices is at a 50-year low, and this historical anomaly strongly indicates that the current copper price priced in gold is undervalued. This means that, driven by potential market dynamics, the outlook for copper is bullish, and this valuation gap is expected to narrow.