Bonds vs. Commodities: The Real Battle for 2025
Copper Is the Compass
When I look at markets, I’m not just looking for price. I’m looking for truth.
Because every cycle, the same thing happens — the narrative runs faster than reality. People start telling themselves stories about rate cuts, recessions, soft landings, or whatever fits the mood of the day. And while everyone’s busy arguing about what Jerome Powell might do next, the real signal is sitting in plain sight — in the charts, in the data, and in the world’s oldest industrial barometer: copper.
The Metal That Sees the Future
Copper has always been the metal that tells you what’s really happening beneath the surface. It’s not glamorous like gold, and it doesn’t dominate headlines like oil. But it has one superpower — it moves ahead of the economy.
You can’t build anything without it. Homes, cars, wind farms, power grids, data centers — all of it runs through copper. When copper prices rise, it means demand for real stuff is rising. And that’s why it’s called “the metal with a PhD in economics.”
So when copper speaks, you listen.
Look at the first chart.
The brown line is copper. The blue line is the 10-year U.S. Treasury yield. Over the past 20 years, they’ve danced almost perfectly together. When copper rises, yields rise. When copper falls, yields fall.
They move that way because they’re both reflections of the same thing — growth and inflation expectations.
The Pullback That Wasn’t a Warning
This year, copper prices cooled off a bit. And right on cue, the headlines started pouring in:
“Copper rolling over.”
“Inflation easing.”
“Bond yields topping out.”
But I never bought that.
Because copper didn’t break trend. It didn’t even come close.
That key level — around 4.25 — held every time.
When a market refuses to break support, it’s not showing weakness. It’s showing demand. And if you looked at the miners — the companies pulling copper out of the ground — they were telling you the same thing. The stocks never broke. They just based, quietly building strength while everyone assumed the story was over.
To me, that was the tell. Copper wasn’t signaling disinflation. It was pausing before the next move.
And if copper holds above $5 — which it’s trying to do right now — then history suggests we’re about to see bond yields follow higher.
Yields Don’t Move in a Vacuum
People often talk about yields like they’re set by the Fed. But the Fed only controls the short end of the curve — the overnight rate. The longer end, the 10-year and 30-year yields, is driven by market expectations of growth, inflation, and risk appetite.
That’s why I always say: watch copper, not Powell.
If copper’s breaking out, it’s a signal that the global economy is heating up again. And when the economy heats up, inflation expectations rise — forcing long-term yields higher.
The bond market is basically saying: “If you’re going to flood the world with easy money again, I’m not lending at 4%. I want 5.”
The Rate-Cut Paradox
Here’s where it gets interesting. Everyone thinks rate cuts will lower inflation. But that’s not how this game works.
When central banks start cutting, they’re usually reacting to economic weakness — but in doing so, they make credit cheaper and liquidity more available. That’s fuel. It doesn’t cool inflation; it stokes it.
We’re already seeing this play out. Globally, the number of rate cuts has exploded — to levels that usually happen during recessions. But look around: commodity markets aren’t behaving like we’re in a recession. They’re acting like we’re in the early innings of another reflation wave.
Powell knows it. He’s warned that cutting too soon risks reigniting inflation. And he’s right. The inflation story was never about one CPI print — it’s structural. It’s about underinvestment, deglobalization, wage pressure, and the global energy transition — all of which are inflationary forces that can’t be solved by tweaking policy rates.
So when the Fed cuts, it’s not the end of inflation — it’s the next chapter.
Commodities Already Know
While Wall Street debates whether the Fed will cut two times or three, the real world is already voting.
GDX (gold miners)
XME (metals and mining)
SLX (steel)
LIT (lithium)
URA (uranium)
Every one of them has outperformed the S&P 500 by 2–6x this year. That’s not a coincidence — that’s leadership.
Markets always move before the narrative. By the time the economists update their inflation forecasts, commodities have already priced it in.
Copper is confirming it.
If copper sustains above $5, it means global growth is stabilizing and inflation expectations are rising. And if that’s true, then long-term yields — especially the 30-year — are likely heading back above 5%.
That would catch a lot of people off guard, because most are still positioned for the opposite — for yields to fall, for inflation to fade, and for rate cuts to “save” markets.
But what if rate cuts light the fuse instead?
Oil’s Turn Is Coming
Now, look at the second chart — Crude Oil vs. the 30-Year Yield.
Historically, they’ve tracked each other closely. But recently, they’ve diverged: yields are climbing while oil’s been stuck around $80.
That kind of divergence doesn’t last forever.
If copper is right — and if yields keep pressing higher — oil is likely next. Historically, energy tends to be the last mover in these cycles. But when it goes, it goes fast.
Think back to 2006–2008, or 2020–2022. The pattern’s the same: metals lead, yields follow, and then energy erupts.
That’s the setup we’re staring at now.
So while everyone’s still focused on the “soft landing” narrative, the charts are already whispering a different story: reflation is back.
The Map Forward
So what’s the takeaway?
Copper has already shown its hand.
Yields are following.
Energy is next.
When you zoom out, the message is simple: this isn’t a deflationary cycle. It’s a rotation inside a long-term commodity supercycle that started years ago.
The Fed can tinker with the short end of the curve, but it can’t control global capital flows or industrial demand. And as long as copper — the world’s economic pulse — is rising, the path of least resistance for yields is higher, not lower.
This is why I keep saying: stay long commodities. Stay with strength.
If copper holds $5, expect 30-year yields to push back above 5%. When that happens, oil and energy equities likely join the move — turning what started as a narrow leadership story into a full-blown commodity rotation.
Final Thought
Markets love to confuse people right before the big move. Copper’s brief pullback made everyone think inflation was finished. But charts don’t lie. Trends don’t reverse quietly.
So ignore the noise.
Follow the signal.
Because copper just told us where this is all going.
Stay long commodities. Energy’s not far behind.
Markets whisper before they shout.
Copper’s whispering right now — and it’s pointing straight toward higher yields, rising inflation, and the next leg in commodities.
Stay ahead of the noise. Get the next 10x trade!
⚡️ Read the signals. Trade the truth.
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