A Historical Divide: A 160-Year View of the Gold-Oil Ratio
2020 has ushered in a new era of prices for two historically significant assets—gold and oil.
The market has driven the pair in polar opposite directions breaking historical patterns. This year, gold brushed above $2,000 an ounce, while oil futures even went temporarily negative in the spring. The gold-oil ratio tells us how many barrels of West Texas Intermediate (WTI) are needed to buy an ounce of gold, serving as a price-based indicator of the relative value of these two important assets.
Historically, the ratio has averaged between 10:1 and 30:1, This year it brushed above 90:1.
First published: November 5, 2020 (link)
Source files included: .ai, .eps, .pdf
Data source: Bloomberg, BP Statistical Review, G&R Estimates
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