Gold / Oil ratio refers to how much crude oil can be bought with one ounce of Gold. With gold at $1000 per ounce and oil at $66 per barrel, the Gold/Oil ratio is at 15.15. The average for the last 40 years has been around 15.
The gold-oil ratio identifies:
– Buying opportunities (for gold) when the gold-oil ratio turns up at/below 10 barrels/ounce; and
– Selling opportunities when the gold-oil ratio turns down at/above 20 barrels/ounce.
– Selling opportunities when the gold-oil ratio turns down at/above 20 barrels/ounce.
Gold-Oil ratio had peaked to 26 during mid of Februray 2009 which shows that either Gold is overbought or Oil is oversold heavily. Since then Gold has almost remains constant with a 5-10% fluctuation with Crude increasing from $35/Barrel to 75$/Barrel which leads the Gold-Crude oil ratio to 12 during mid of August 2009
From the charts you could see that recently Gold-Oil ratio is increasing once again Since of August from 12 to 15 along with
positive divergence as seen in slope indicator. Slope Indicator 20 and 50 day period turning Positive indicates that the uptrend in
gold crude oil is likely to continue.
So what does a rising Gold-Crude oil ratio means?
1)Either Gold should remain constant with minor flucutations and crude should move down heavily
2)Gold Should move higher with Crude should remain constant
Any one of the above two factors will make the Gold-Crude oil ratio to inch up higher
Related readings
Gold-Oil ratio Lookup – 19 Jan 2009
Related Readings and Observations
What is Broker Tick and Exchange Tick? TICK in my option is continuous tick coming from broker to user or retailer. this kind of tick is called as BROKER TICK, since it is coming from broker and hence it can vary broker to […]
Short Term Momentum in WTIC Crude Likely to Continue WTIC Crude is showing signs of strong momentum on Friday it is up by 4% during the U.S session. Since 22nd Nov 2018 crude is trading in a consolidation band of 50-54 range with couple of […]
Paracables Short Term Call : Target Rs 55 Script Name : Paracables CMP Price : Rs44.25 Target Price : Rs 60 Time Frame : 1 Month(Short Term) Potential Upside : More than 20% About the Company Paramount […]
Which is the most favorite Trading Software among the Traders? Was really interested in checking out which trading software has been favored by most of the traders in the world and the below metric shows which trading software is most popular based […]
Reliance Breakout Above Rs1090
21 day Twiggs money flow chart of Reliance Chart shows that it has broken
the twiggs money flow negative divergence and also trading above zero, which
indicates buying […]
Nifty Weekly wrap up and Global Sentiment Nifty and Bank Nifty futures turned to positional sell mode on 23rd of September and currently the resistance zone comes around 8105.73 and 15840 respectively reverse your position to […]
Leave a Reply