Gold-Oil Ratio Shows Crude Drop Tied to Supply: Chart of the Day
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The highest gold prices relative to oil since the 1990s show crude’s plunge stems from excess supply rather than potential deflation, according to Michael Shaoul, chief executive officer of Marketfield Asset Management LLC.
The CHART OF THE DAY shows the ratio between the two commodities since 1971, when the precious metal’s price was allowed to fluctuate rather than being fixed in dollars. Spot gold, available for immediate delivery, and historical crude prices compiled by Bloomberg were used in the comparison.