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XMFSinchiruna (26.40)

Gold-to-Oil ratio at an all-time record low!



June 04, 2008 – Comments (10)

Sure, oil could retreat a little temporarily, but not enough to bring this ratio back into the historical range.  Nope, that will only be achieved by a major move in gold, and the disconnect portrayed by this chart is part of the springboard that will propel gold to such heghts.

The catalyst, though, will be the resumption of the dollar's slide, which is, I'm afraid, inevitable.

10 Comments – Post Your Own

#1) On June 04, 2008 at 8:09 PM, rudolphsteiner (< 20) wrote:

Interesting. That's why I have both gold and oil. I knew there was a reason.

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#2) On June 04, 2008 at 8:40 PM, abitare (29.91) wrote:

I do think there is a posibility of a dollar bounce. It depends on the war IMHO. If Iraq/Iran calms down the dollar may rally, yesterday on CNN ADM Fallon (CENTCOM Retired) said there was no plan to attack Iran. That should calm hostilities for the short term. If McCain is elected then I expect gold and oil to remain strong.

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#3) On June 04, 2008 at 9:24 PM, HooDaHeckNose (74.27) wrote:

If McCain gets elected I expect pigs to be flying up Wall street and  gumdrops raining down across the land. All hail President Obama. If the market were as easy to predict as this year's election, I'd be a billionaire.

There are just too many stupid people in this country for Ron Paul to have a shot, what a shame.

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#4) On June 04, 2008 at 11:39 PM, Black2Scholes (< 20) wrote:

your average american probably has no idea what Ron Paul is talking about.  Sadly, I think Ron Paul is the only one who can save our country from exploding into an endless spiral of debt and bubbles.

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#5) On June 05, 2008 at 12:19 AM, Tastylunch (28.58) wrote:


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#6) On June 05, 2008 at 12:33 AM, binv271828 (< 20) wrote:

Nice chart!

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#7) On June 05, 2008 at 7:36 AM, AnomaLee (28.87) wrote:

I'm sure we'll see gold increase 50% before we see the major stock indexes do the same in a set timeframe, but I am concerned about the demand for gold. Unlike silver or copper, gold demand is primarily for non-industrial purposes(jewelry) and the majority of gold demand is from wealthy nations whose declining economies now have less disposable income. Supply and demand are the utlimate factors of trade and recent demand destruction may largely explain the recent price stagnation.

Gold Supply and Demand – Q1 2008

Dollar demand for gold reached US $20.9bn in the first quarter of 2008, a 20% increase over the same period in 2007 and more than double the level of four years earlier.  However, tonnage demand for gold at 701 tonnes was down 16% on the same period last year and represents the lowest quarterly figure for five years, according to according to Gold Demand Trends, released on May 20 by World Gold Council (WGC).

The fall in tonnage demand was caused primarily by the sharp rise and unusually high volatility in the gold price, which briefly touched record levels above $1,000/oz in mid-March. The impact of this price rise was felt most keenly in the ‘physical buying’ markets of gold jewellery and coins and bars. Jewellery demand declined 21% year-on-year to 445.4 tonnes, the lowest quarterly level since the early 1990s. Net retail investment demand dropped by 35% to 72.7 tonnes in Q1.

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#8) On June 05, 2008 at 12:01 PM, FourthAxis (< 20) wrote:

Ha Ha, That's so funny you posted this.  I was just looking at a chart last night with gold, oil, $, S&P, etc.  I noticed gold and oil had drifted WAY apart.  Since I'm not silly enough to short oil...I also think gold needs to bust a move. 

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#9) On June 05, 2008 at 4:17 PM, XMFSinchiruna (26.40) wrote:


Try some additional sources for gold supply/demand info:

Also, try this view from James Turk, who has an opinion or two about the World Gold Coucil that you cite above:

James Turk: An overview of gold's supply and demand

4:40p ET Monday, February 25, 2008

Dear Friend of GATA and Gold:

GoldMoney founder James Turk, editor of the Freemarket Gold & Money Report and consultant to GATA, argues in a new essay that gold is a hugely misunderstood asset -- and no better understood because of the World Gold Council, whose main purpose long has seemed to GATA to be to make sure that there never is a world gold council.

Confusion about gold arises, Turk writes, "because so many people -- including many people within the gold industry -- refuse to acknowledge that gold is money. They attempt to analyze gold as if it was a mere commodity with some jewelry fabrication and unimportant industrial application instead of what it really is -- money."

Turk's essay is headlined "An Overview of Gold's Supply and Demand" and you can find it at Kitco here:

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#10) On June 27, 2008 at 4:05 PM, ahabswife (62.16) wrote:

Good for you Hoo.

TMFSinchiruna, thank you for the post and information

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