Gold-oil ratio goes wild

Gold miners can now buy 30.33 barrels of West Texas Intermediate crude oil for every ounce of gold they sell. That is the most in at least 15 years.

Oil-gold ratio

If history is any guide, I’d expect that extreme reading to revert to the mean, which would require cheaper gold or pricier oil. But for now, gold miners are doing great. Which is probably why their stock index looks like this:

GDX index weeklies

1 thought on “Gold-oil ratio goes wild”

  1. notiven

    Hi There Steven: Nice take on this relation. The detail I would have liked to see in the first graph is the use of the same days of Moving Averages ( MA ) for both variables, you used 50 and 200. Since I guess you used spot prices to do the main graph, to me a lower MA would be better because of the volatility of these products spot prices. Your graph relating these prices is so interesting I am going to see how I create one myself.
    Javier

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