The basic relationship between how much gold is worth and the US Dollar is well known and understood and like any economic indicator, there are periods when the relationship is weak and periods when it is strong.
But what about oil? Is there a relationship between these two real and tangible commodities as opposed to the dollar which is a fiat based paper currency?
Gold / Oil Ratio
The oil price is closely integrated with the political situation in the Middle East whereas movements in how much gold is worth is affected by global central banks and other factors. Nevertheless, a study of these two critical resources makes for interesting reading.
If a graph were to be plotted that measured movements in the gold and oil price, a straightforward relationship between the two would result in a line of constant value. Even if the price movements were not proportionate to each other, the line would still be linear but may rise or fall.
Gold-Oil Ratio
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