Gold/Oil Ratio at Extreme!
From Kitco, Gold/Oil Ratio Extremes 3 by Adam Hamilton, an excellent article analyzing the relationship between the price of Gold and the price of Oil (GOR)
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Five times since 1975, the GOR has been below 10 since 1975. Each time the GOR went back to at least 15.2, it's average. Now for the sixth time we are below 10, currently at 6.6. With Oil at $65, a GOR of 15.2 puts gold at $988. If I were selling oil for USDs, I would take the USDs and buy Gold. If things work out for the sixth time, it would be like selling Oil for $130. It may be the best trade in the last 35 years!
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Posted by movermike on
Sunday August 21, 2005 at 4:00pm
Mover Mike