## Precious Metal Relative Valuation Reassessment: Gold-Copper Ratio Trends Signal Triple Market Signals

Gold's relative appreciation against oil prices is accelerating, with copper prices leading oil price gains. These two seemingly niche commodity relative price indicators are sending a complex signal to the market — the current market focus is not driven by a single factor, but rather by the interplay of multiple forces. From the perspectives of AI technology acceleration, global tariff policy adjustments, and a persistently strong labor market, the rising trend of the gold-copper ratio precisely reflects investors' cautious attitude toward risk assets.

### Gold-Copper Ratio Reaches New High: Risk Warning or Cycle Transition?

The current gold-copper ratio has approached the high of 41.75 seen since late October last year, representing a continuous upward trend since mid-January. The gold-copper ratio is calculated by dividing the gold price per ounce by the crude oil price per barrel, both denominated in USD. Why is this indicator worth paying attention to? Because it is deeply related to economic cycles — when the gold-copper ratio rapidly climbs to mid-to-high levels, it often signals small-scale geopolitical crises or financial market volatility. When gold significantly appreciates relative to oil prices, it indicates rising market risk aversion.

Conversely, the copper-oil ratio also shows a sustained upward trend, which is interesting. Generally, a faster increase in copper prices compared to oil prices suggests an improving economy, but a continuous decline in the copper-oil ratio indicates oil prices are rising faster than copper, implying increasing stagflation risks. The current rise in the copper-oil ratio suggests that market expectations for economic recovery still exist, but the strength of these expectations is being constrained by other factors.

### Interplay of Three Factors: Tariffs, Inflation, and AI

**Rapid escalation of US tariff policies**

On February 10, U.S. President Trump announced a 25% tariff on all imported steel and aluminum products. More critically, Trump will announce a "reciprocal tariff" measure this week, imposing tariffs on U.S. imports at the same rate as trade partners' tariffs on U.S. exports. These measures will apply to all countries. This indicates that U.S. trade policy is moving toward a comprehensive adjustment, and the implementation of reciprocal tariffs may mark another significant escalation. U.S. tariff policies have become a key factor triggering market risk aversion.

**Labor market and inflation stubbornness**

Last Friday, the U.S. January non-farm payrolls increased by 143,000 jobs, the lowest in the past three months, but average hourly earnings rose 0.5% month-over-month, exceeding the expected 0.3%. Faster-than-expected wage growth could push up service sector inflation. The sustained strength of the labor market increases re-inflationary pressures, leading to a downward revision of the Fed's rate cut expectations for the year. Currently, the market bets that the Fed will only cut rates once in 2025. This means that even if signs of economic slowdown appear, inflation stickiness continues to support a high interest rate environment.

**AI-driven new growth point for copper demand**

Most notably, DeepSeek's impact on downstream application ecosystems is accelerating. Chile's National Copper Commission forecasts a global copper supply gap of 118,000 tons by 2025, driven by the widespread adoption of AI technology. OpenAI CEO Sam Altman emphasized in a February 10 article that OpenAI is fully deploying AI Agents, which will be widely used in various business scenarios. AI data centers are expected to become a new growth point for copper demand, directly boosting expectations for copper resource needs.

### Three Layers of Market Focus Implication

The trend of the gold-copper ratio reveals three implications: First, rising risk aversion boosts gold's relative value; second, strong copper price expectations reflect optimism about AI-driven economic growth; third, the lagging oil prices reflect uncertainties facing global economic growth.

In the short term, market movements will continue to fluctuate around tariff policies, inflation data, and AI development trends. If tariff policies significantly impact the global economy and trigger inflation, risk aversion may intensify. On the other hand, the rapid development of artificial intelligence is re-evaluating tech company valuations, but as China is a major producer, AI-driven automation may also exacerbate deflation risks, which could be a key reason why oil prices have yet to stabilize. In this complex environment, the gold-copper ratio will continue to serve as a thermometer of market sentiment.