drbubb Posted September 3, 2008 Report Share Posted September 3, 2008 It certainly looks to me that Gold is trying to delink from (weak) oil here Update ... http://tinyurl.com/gold-wtic long term: http://gold.approximity.com/Gold_Oil_Ratio_since1946.pdf Link to comment Share on other sites More sharing options...
drbubb Posted September 3, 2008 Author Report Share Posted September 3, 2008 Flipping it around: here's Oil-to-Gold : ie 100 barrels Oil = ? ounces of Gold (Historical) : Oil looked expensive at 12-13 ounces per 100 barrels / ie 0.12-0.13 oz per 1 barrel Where is the Ratio now?? (Current) : Oil-to-Gold : Ounces of Gold to make 1 Barrel ... http://tinyurl.com/wtic-gold It has been trading consistently above 0.13 for many weeks. A break of that level (0.13) would be a sign that the Gold is trying to decouple. And a fall below 0.125 (?) would be a further confirmation of that Equivalent: 0.13 = 7.69 Barrels per Gold ounce Link to comment Share on other sites More sharing options...
Gatesy Posted September 3, 2008 Report Share Posted September 3, 2008 So in other words the average gold:oil price ratio has been roughly 14 over the past 40 odd years. I know the continuing rationale for this was debated on a main thread somewhere, but interesting nevertheless that with oil at say $100, an "average" target for gold based on the above ratio would be $1400. I suppose I'd like to think we see this average reached in the near future to reflect some level of fair value against oil, but the reality is that this average ratio has only been hit once, briefly, during the commodities bull since 2000. Perhaps another scenario is that oil stays flat or starts to grow again and bootstraps gold with it. Thus an average ratio so far during the bull of say 12 will see gold at $1200 with oil at $100; if oil rises then gold does too? ie. we are not reliant on a reversion to the mean of 14 times to see a nice up leg in gold (in line with your charts below Dr.) Link to comment Share on other sites More sharing options...
drbubb Posted September 5, 2008 Author Report Share Posted September 5, 2008 KEY LEVEL: Looks like Gold-to-Oil is right at the key level: 0.13 $811 x 13% = $105.43. If oil falls below this, perhaps because Gold rises while oil lags, that would be a sign of the decoupling (that I have been waiting for.) It's nice to see Gold showing some strength while stocks are so weak. That's how it supposed to work, especially in September Link to comment Share on other sites More sharing options...
drbubb Posted September 5, 2008 Author Report Share Posted September 5, 2008 So in other words the average gold:oil price ratio has been roughly 14 over the past 40 odd years. I know the continuing rationale for this was debated on a main thread somewhere, but interesting nevertheless that with oil at say $100, an "average" target for gold based on the above ratio would be $1400. That's not quite right. KEY LEVEL for oil-to-gold is 0.13 And Gold-to-Oil is: 1/0.13 = 7.69 So Oil x 7.69 = $100 x 769= $ 769 Currently, oil is $106, so: $106 x 7.69 = $815 That key support level is holding so far - but only just Link to comment Share on other sites More sharing options...
Gatesy Posted September 5, 2008 Report Share Posted September 5, 2008 That's not quite right. KEY LEVEL for oil-to-gold is 0.13 And Gold-to-Oil is: 1/0.13 = 7.69 So Oil x 7.69 = $100 x 769= $ 769 Currently, oil is $106, so: $106 x 7.69 = $815 That key support level is holding so far - but only just Yes, but rather than looking at support, which is obviously very important at the moment, I had the target averages in sight from this bull market of the last 8 years, which should be in the range of $1200-1400 at $100 oil. We are obviously way off that and at the bottom looking for support I agree. Link to comment Share on other sites More sharing options...
dietcolaaddict Posted September 6, 2008 Report Share Posted September 6, 2008 I've become very interested in this ratio recently. It can swing very quickly from max to min (and vice-versa) Link to comment Share on other sites More sharing options...
drbubb Posted September 8, 2008 Author Report Share Posted September 8, 2008 Here's OIL in Euros : WTIC-to-FXE Link to comment Share on other sites More sharing options...
drbubb Posted September 9, 2008 Author Report Share Posted September 9, 2008 TIME to buy oil, maybe Link to comment Share on other sites More sharing options...
ologhai Posted September 9, 2008 Report Share Posted September 9, 2008 TIME to buy oil, maybe I better get myself down to Halfords, pronto! This might not translate well outside of the UK... Link to comment Share on other sites More sharing options...
drbubb Posted September 10, 2008 Author Report Share Posted September 10, 2008 I better get myself down to Halfords, pronto! This might not translate well outside of the UK... sadly, that lower channel did not hold Link to comment Share on other sites More sharing options...
jerpy Posted September 10, 2008 Report Share Posted September 10, 2008 sadly, that lower channel did not hold Easy for me to say now, but as someone who pays passing notice to charts, although i do believe some of the points posted by smarter investors than myself, i'm beginning to wonder whether charting has any bearing at the moment; as everytime someone puts one up in the expectation of floors being reached, the brakes don't seem to work! Not just that particular chart so no offence, just a general comment are chartists flawed in the current climate? Link to comment Share on other sites More sharing options...
drbubb Posted September 16, 2008 Author Report Share Posted September 16, 2008 The Oil-to-Gold ratio has finally broken down This suggests that Gold has decoupled from (weak) oil. When I look at the Oil chart, I still only see an A-wave down, and so a bounce in Oil, may be followed by a retest of the lows. Now gold may be free to move up on its own Link to comment Share on other sites More sharing options...
drbubb Posted September 16, 2008 Author Report Share Posted September 16, 2008 Easy for me to say now, but as someone who pays passing notice to charts, although i do believe some of the points posted by smarter investors than myself, i'm beginning to wonder whether charting has any bearing at the moment; as everytime someone puts one up in the expectation of floors being reached, the brakes don't seem to work! Not just that particular chart so no offence, just a general comment are chartists flawed in the current climate? Come on! You need to have a little patience!! When I show a chart and say "possible low (maybe)" I am identifying a possible turning point. As a trader, In take a smallish position sometimes when it touches these points, and then wait to see how it behaves afterwards. If we get a good turn out of the chartpoint, then I look for an entry point to take a bigger position. That's the safer way to play it. Would you rather I let these points go by, and then tell you afterwards? (i think you would tell me: Bubb, you are only finding those points in hindsight) There arent many certainties in trading, only opportunities and windows, which have risks associated with them. And watching these points (while trading them intelligently), is likely to give you far better results than trading at random, based upon some fundamental story you hear. The best of all, is to combine the fundamentals (look to buy what is cheap, and should get less cheap), and then buy it when the charts provide good windows. But buy carefully and intelligently, as I have described. Link to comment Share on other sites More sharing options...
Gatesy Posted September 17, 2008 Report Share Posted September 17, 2008 Come on! You need to have a little patience!! When I show a chart and say "possible low (maybe)" I am identifying a possible turning point. As a trader, In take a smallish position sometimes when it touches these points, and then wait to see how it behaves afterwards. If we get a good turn out of the chartpoint, then I look for an entry point to take a bigger position. That's the safer way to play it. Would you rather I let these points go by, and then tell you afterwards? (i think you would tell me: Bubb, you are only finding those points in hindsight) There arent many certainties in trading, only opportunities and windows, which have risks associated with them. And watching these points (while trading them intelligently), is likely to give you far better results than trading at random, based upon some fundamental story you hear. The best of all, is to combine the fundamentals (look to buy what is cheap, and should get less cheap), and then buy it when the charts provide good windows. But buy carefully and intelligently, as I have described. Nice advice Link to comment Share on other sites More sharing options...
chazza Posted October 10, 2008 Report Share Posted October 10, 2008 Gold:Oil ratio at an interesting level. Close to resistance around 11, does gold spike higher or are we bottoming in oil.... Link to comment Share on other sites More sharing options...
drbubb Posted October 25, 2008 Author Report Share Posted October 25, 2008 What a move! Now oil is looking relatively cheap Link to comment Share on other sites More sharing options...
jerpy Posted February 25, 2011 Report Share Posted February 25, 2011 Yes, but rather than looking at support, which is obviously very important at the moment, I had the target averages in sight from this bull market of the last 8 years, which should be in the range of $1200-1400 at $100 oil. We are obviously way off that and at the bottom looking for support I agree. Bump. Funny how things work out. So is oil cheap or expensive, or does it no longer have any meaning Dr Bubb? Link to comment Share on other sites More sharing options...
jerpy Posted December 30, 2011 Report Share Posted December 30, 2011 Bunp again! Oil has been on a strong ascent since the August bottom to Gold. The Gold to Oil chart looks like a steep walk up and down a hill since April, surprised to see little comment anywhere on these. Maybe reading the wrong threads(or not reading the right ones). Link to comment Share on other sites More sharing options...
G0ldfinger Posted January 31, 2012 Report Share Posted January 31, 2012 Longer term: http://gold.approximity.com/since1959/Oil-Gold-Ratio.html http://gold.approximity.com/since1959/DJIA-Oil-Ratio.html Link to comment Share on other sites More sharing options...
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