Sunday , 21 July 2019

Historical 92.3% Gold/Oil Correlation Suggests Gold Is Currently Undervalued By?

Since 1970 there has been a 92.3% correlation between the price of gold and oil. The current gold to oil ratio is 11.8. If the ratio were to resume its historical average of 15.5, the gold price would be $1,736!

The above introductory comments are taken from the chart* below by which shows the relationship between gold & oil and suggests what the current price for gold should be these days given its historical correlation.

The following article is presented courtesy of Lorimer Wilson, editor of (Your Key to Making Money!)and (A site for sore eyes and inquisitive minds) and has been edited, abridged and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.

* (© Copyright 2003-2012 Bullion Management Group Inc. All rights reserved.)

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One comment

  1. One important point to remember is that “historically” there was much more Oil. plus it was easier to drill for and/or bring to market, so I expect the correlation to now swing in favor of Gold (and the other PM’s).