marcos, sir, I've just had a look at a Yahoo chart comparing XOI (Amex oil index) with GOLD over the last 4.5 years. [Must find out how to post a chart.] They ran roughly in parallel -- with the oil index rising along the upper channel line and gold rising along the lower channel line -- until last September when oil went down big and gold went down less and forever up since.
(Over the last 4.5 years, oil rose a max of ca. 130%, presently at 35%. Gold rose a max of ca. 115%, presently at ca. 110%.)
Of course, if I look at the 3 month performance of the same pair of indices, the relation seems to have reversed. I.e., oil and gold run parallel again but for now, it's gold which has risen along the upper channel line, and it's oil which has risen along the lower channel line.
Now, 5 years are 5 years, and 3 months are a mere 3 months. I prefer thus to give more weight to the longer-term relationship between oil and gold:
If the XOI/GOLD ratio remains intact LT, and if the ratio reverts to the longer-term mean, and if we expect an oil price (=XOI) of US$300 by the end of 2013 (a rise of 750%; may we yet live), then gold will be anywhere between $8,976 and $9,384 per ounce (i.e. 10 to 15% above oil rise).
And remembering that I was an utter failure at even simple arithmetics at school, I look much forward to being scolded and corrected. |
