Choose a futures pair or a spot benchmark pair
Start by writing down which prices the ratio will divide. The examples here use the standard COMEX Copper and Gold futures families. TradingView lists HG1! and GC1! as continuous contracts. For a reproducible observation around a roll, also record the dated contracts supplying each series. Two first-continuous symbols need not represent the same delivery month.
- LME copper futures are quoted in USD per tonne, while the TradingView COMEX copper example uses USD per pound. A matching currency does not make those quote numbers interchangeable.
- The LME cash price and three-month price describe different delivery dates. Choose one benchmark and retain its definition throughout the history.
- A symbol name alone is insufficient for a broker metal feed. Inspect the instrument description, provider and price unit before using it.
| Input choice | Meaning | What must stay fixed |
|---|
| COMEX:HG1! / COMEX:GC1! | Continuous copper futures divided by continuous gold futures | Both roll histories, adjustment settings and observation times |
| Two dated COMEX contracts | Prices of specified delivery contracts | Delivery months and a declared rule for replacing expiring contracts |
| Cash copper benchmark / spot gold benchmark | A ratio of specified physical-market reference prices | Providers, benchmark times, quote units and publication calendars |
| Copper futures / broker XAUUSD feed | A futures-to-spot or futures-to-CFD comparison, depending on the feed | Identify the gold instrument; do not label the result a pure spot ratio |
Reconcile raw prices, display scaling and contract values
Assume simultaneous prices of copper C = 4.50 USD per pound and gold G = 2,250 USD per troy ounce. These are invented teaching inputs, not current quotes. Define R = C / G. The currency cancels, but the quoted mass units differ: the numerical level describes gold troy ounces per pound of copper. It is not a percent return.
- CME specifies a standard Copper contract as 25,000 pounds and a standard Gold contract as 100 troy ounces. Contract size belongs in notional exposure and profit calculations, not in an unweighted quote-price ratio.
- In this example, two standard copper contracts have the same starting notional as one standard gold contract. That equality is not a volatility hedge, a trading recommendation or a guarantee of offsetting losses.
- If one quote is in another currency, convert it using a contemporaneous FX rate with the correct direction. Converting both USD legs to the same currency at the same FX rate leaves their ratio unchanged.
- A zero gold price makes the ratio undefined. Missing, nonpositive or clearly erroneous input prices should fail the data check before any relative-performance interpretation.
| Calculation | Worked result | Interpretation |
|---|
| C / G | 4.50 / 2,250 = 0.002 | Raw USD-per-pound / USD-per-troy-ounce ratio |
| Copper cents / gold dollars | 450 / 2,250 = 0.2 | A 100-times display scale; thresholds must change too |
| 1,000 × C / G | 1,000 × 0.002 = 2.0 | An explicitly scaled display index |
| G / C | 2,250 / 4.50 = 500 | Gold-copper ratio: the reciprocal, with reversed direction |
| (25,000 × C) / (100 × G) | 112,500 / 225,000 = 0.5 | One standard copper contract notional divided by one standard gold contract notional |
Open and audit the TradingView expression
In Supercharts, open Symbol Search and enter COMEX:HG1! / COMEX:GC1!. TradingView supports division in spread expressions. Use standard time-based candles, then open each underlying symbol separately to inspect units and data status. For a scaled view, enter 1000 * COMEX:HG1! / COMEX:GC1! and label the multiplier in your notes.
- Select a completed observation and record each leg price. Divide them independently and compare with the expression close. Do not compare a settlement on one leg with a last-trade close on the other without documenting that choice.
- Keep the timeframe, session and observation method fixed. A daily label does not prove that the underlying prices were measured simultaneously.
- Inspect the ratio close separately from its high and low. TradingView documents different historical intraday and live spread construction, with values potentially changing after reload; a synthetic wick is not evidence of simultaneous executable prices.
- Use the general spread and ratio charts guide for expression syntax and an aligned-close Pine monitor. This copper-gold workflow adds the instrument and unit decisions that the generic expression cannot make for you.
A contract roll can look like relative strength
The following roll example holds market prices fixed and changes only the selected copper contract. Assume the outgoing copper contract is 4.50 and the incoming contract is 4.59 at the same observation time, while gold remains 2,250. Switching the numerator produces an apparent 2% ratio rise even though neither individual contract moved.
- TradingView back-adjustment shifts earlier contract history using the new-minus-old close difference near a switch. In this simplified case that difference is 0.09 for copper. Record whether back-adjustment is enabled for each leg.
- Adjusted history can remove a visible roll gap while changing old ratio levels. Dividing two separately adjusted series does not restore the original historical price ratio.
- Before assigning a macro explanation to a jump, inspect both roll dates and dated contracts. If the intended study uses observed prices, preserve those observations separately from a later back-adjusted download.
| Series definition | Ratio | Change from outgoing contract |
|---|
| Outgoing copper / gold | 4.50 / 2,250 = 0.00200 | Reference |
| Incoming copper / gold | 4.59 / 2,250 = 0.00204 | +2.00% from selection alone |
Different trading days can create a false daily move
Use a declared matching policy. This hypothetical example accepts a daily observation only when both required benchmarks have a value for the chosen business date and meet the stated timing rule. The missing copper observation could reflect a benchmark holiday or a feed interruption; this is not an actual exchange holiday record.
- On Day C, both valid prices are 2% above Day A and the ratio is unchanged. Filling the missing numerator made Day B look like relative copper weakness without a fresh copper observation.
- A same-date match is still weaker than a same-instant match. Check each benchmark fixing time, exchange calendar and data delay; changing the chart timezone cannot repair those differences.
- If the policy requires matched observations, leave missing rows unavailable. State whether a return compares adjacent calendar dates or consecutive valid observations, since a gap changes its elapsed horizon.
| Observation | Copper | Gold | Result under the policy |
|---|
| Day A: both available | 4.50 | 2,250 | 0.00200 |
| Day B: copper missing | Unavailable | 2,295 | Unavailable |
| Day B: incorrect carry-forward | 4.50 from Day A | 2,295 from Day B | 0.00196078, apparently -1.96% |
| Day C: both available | 4.59 | 2,295 | 0.00200 |
A rising ratio does not mean copper or stocks rose
For positive, consistently defined prices, R1 / R0 = (1 + copper return) / (1 + gold return). This identity describes relative metal performance. It contains no equity price, bond yield or economic release. All cases below start at copper 4.50 and gold 2,250, with R0 = 0.002; they are hypothetical arithmetic counterexamples.
- The second case has R1 = 4.275 / 2,025 = 0.00211111. Copper lost value despite the rising ratio. An equity index could fall 3% over the same interval without contradicting any number in this calculation.
- CME discusses the copper-gold ratio alongside US 10-year Treasury yields as a historical economic-cycle relationship. Treat that as a research hypothesis. A visual association is not a calibrated yield forecast or proof that the ratio leads yields.
- Copper-specific supply disruptions can change the numerator, and gold-specific demand can change the denominator. Either can weaken an interpretation based only on broad economic growth.
| Case | Copper change | Gold change | Ratio change |
|---|
| Both metals rise equally | +10% to 4.95 | +10% to 2,475 | 0.00% |
| Both metals fall | -5% to 4.275 | -10% to 2,025 | +5.56% |
| Gold rises faster | +2% to 4.59 | +5% to 2,362.50 | -2.86% |
Write a testable macro claim before creating an alert
Specify the predicted outcome separately from the ratio. For example: does the prior completed month's ratio change help explain the next month's change in a chosen 10-year Treasury yield series? Freeze the instruments, unit scale, matched-date rule and sample split before inspecting results. This is a proposed research design, not a tested finding.
- Use ratio percentage changes and yield changes in basis points for that stated question. Comparing two trending price levels or rescaling two axes answers a different question.
- Use only values available when the forecast would have been made. Do not use the same month's final ratio to claim a forecast of an earlier yield move.
- Keep later dates for a separate check, report failures as well as matches, and compare with a simple baseline such as no forecast change. Record how conclusions change around rolls and missing dates.
- For an alert, define the ratio scale, completed-bar condition and missing-data behavior. Test a valid crossing, a roll and a missing interval before relying on notifications.
Keep the chart definition with the research note
Pineify can help turn an explicit ratio-monitor specification into editable Pine Script. Give the agent both symbols, quote units, scale, observation rule and alert condition. Review the generated requests and reconcile several values in TradingView. Record the formula and the original hypothesis in Trading Journal so a later review can distinguish a data change from a failed forecast.
- A useful note includes the observation timestamp, two input prices, independently calculated ratio, contract months, adjustment settings and missing-data decision.
- Write the target asset, forecast horizon and invalidation condition before the outcome. Keep a dated chart capture with your research materials for later comparison.
- Code generation and journaling do not supply a validated macro model or establish a profitable two-leg trade.
