What the Gold-to-Oil Ratio Reveals About Market Trends

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Gold-To-Oil Ratio News

Gold Prices,Oil Prices,Commodity Markets

This article explores the historical relationship between gold and oil prices, using the gold-to-oil ratio to illuminate economic trends and market dynamics.

Gold and oil - two of the most influential commodities on the planet - have a fascinating relationship that has evolved over decades, captured in the gold-to-oil ratio. The gold-to-oil ratio represents the number of barrels of crude oil equivalent in price to one troy ounce of gold. It is viewed as an indicator of the health of the global economy, indicating when gold or oil prices are significantly out of balance with each other.

This can indicate periods of outsized demand for energy in the form of crude oil, or periods of monetary uncertainty when there is higher demand for gold. Below is the gold-to-oil ratio every decade between 1946 and 2024. During the 1950s and 1960s, fixed gold prices and stable oil prices kept the ratio between 11 and 13 for 20 years. Since the 1980s, the ratio has typically traded within the range of 6 to 40 with a notable exception in 2020 when the ratio reached a high of 91.1.

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